The Rural Voice, 2006-08, Page 659
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PERTHAitk
County Pork Producers NEWSLETTER
Will it be there when I need it?
Any opinions expressed herein may
not necessarily reflect the views of
the Perth County Pork Producers'
Association.
Recently Hydro One called our
neighbourhood to let us know that the
power would be off for a couple of
hours the next morning — a good
thing, since I was able to make feed
ahead so that things went smoothly
during the outage.
Anyway, we hooked the tractor up
to the standby PTO generator that we
have because it was up in the 30
degree C area that day. It gave me
pause to realize once again just how
dependent we are on the electricity
that comes to our farm over the wires.
I have looked in the past at the
wind turbine idea, or solar, or even
methane from the manure that the
pigs produce. Sometimes one is
tempted to think how much money
could be saved if I could keep the
money that I use to pay for electricity
each month at home on the farm.
After all, it is a fairly big cost and
maybe I could do it more efficiently
than they can. Maybe there are skills
and abilities that I already possess
that will allow me to turn more of a
profit by putting a little extra time
into it.
I wouldn't have these problems
that Hydro One has from time to
time, I would be master of my own
destiny and surely I would be much
happier. The monopoly of Hydro One
would be better off with the
competition that I (and other like -
That 'New Normal' business plan
It's that time of year when we
meet with our accountant to assess
our year end financial statements.
With a July 31 year end we are
afforded the time to analyze what
went right (not much) and what went
wrong (everything) over the past 12
months. Historically we've made
good money from 2000-2005, but
2006 is definitely below expectations.
We averaged $135/pig in income for
the past year, but expenses continue
to creep up pressuring our bottom
line. I'm struggling to see where we
can reduce costs enough to allow us
to enjoy the margins we've been
accustomed to.
When the "New Normal" was
announced almost three years ago, it
implied that the ability to raise pigs
for $130 was paramount if a producer
was to survive. That statement was
made when the exchange rate went
from 65-75 cents U.S. We're now
looking at a 90 -cent dollar with the
challenge that raising pigs for $130
isn't going to cut it. If we take the
past five years CME average price
and apply the current formula pricing
and exchange rate, $130/ pig income
is as good as it gets. For some
producers that's breaking even at
best, for others it will be mounting
losses.
I'm struggling with what our
business plan will look like going
forward. We're currently enjoying
low feed prices, the devastating
effects of circovirus seem to be
subsiding, and interest rates have not
appreciated. Unfortunately we all
realize that corn and soymeal can
reach $175 and $400 per tonne
respectively, there will be another
new disease challenge in the next five
years, and interest rates could reach
double digits again.
Do we stay in a business where
hope is the only answer and breaking
even is the reward for a job
exceptionally well done? Or do we
begin to chop away at our expenses
until we reclaim the margin we've
been accustomed to?
For those wanting to expand or
enter our industry, the opportunity to
set a new lower benchmark for cost
of production will come at the
expense of others' equity. Asset
values decrease when profits are low
to non-existent.0
— Submitted by Phil Anwender
Russ Danbrook, President
519-356-2385
• The Rural Voice is provided to Perth
County Pork Producers by the PCPPA.
minded, progressive entrepreneurs)
would provide, and the poor saps that
would continue to use the out -dated
system, I couldn't care less about.
On the other hand, while my
tractor was roaring away providing
my power that morning, I was hoping
nothing would go wrong with either
it, or the generator, and hoping the
quality of the electricity wasn't going
to negatively affect anything on the
farm. I was also wondering whether I
was making or losing money if I
considered all the costs to making my
own electricity. Could my time be
better spent doing the job on the farm
while the people at Hydro One could
do theirs? If there was a major
problem I guess I could always go
back to the status quo, but what if I
(and other like-minded, progressive
entrepreneurs) neutered Hydro One in
the process and I was left with
nothing?
This is a little allegory. Humor me
and reread this substituting OPPMB
for Hydro One and thinking of the
potential for marketing hogs as
individual producers, or their
representatives, rather than as a
collective body. Just my opinion.0
— Submitted by Ron VanBakel
PERTH COUNTY
PORK PRODUCERS'
PORK PRODUCTS
• Smoked Pork Chops
• Fresh Pork Chops
• Stuffed Loin Chops
• Smoked Sausage
• Smoked Cheddar Sausage
• Bacon Burgers
• Teriyaki Pork Steaks
• Vittorio's BBQ Sauce
AVAILABLE FROM:
Steve Hulshof (Kinkora) 348-8167
Walter Bosch (Monkton) 356-9000
Ted Keller (Mitchell) 348-9836
AUGUST 2006 61