The Rural Voice, 1991-12, Page 63PERTH rtk
County Pork Producers NEWSLETTER
Vince Hulshof, President
R. R. 1, Sebringville, NOK 1X0 393-5586
The Rural Voice is provided to Perth
County Pork Producers by the PCPPA
REVIEW OF THE SELLING SYSTEM
The information enclosed is a sum-
mary of the preliminary report on the
"review of the selling system." Re-
gional meetings are scheduled this
month to discuss these with the council-
lors.
It presents some opportunities for
producers to seek out their own deals
with packers, either individually or as a
group, and be compensated for their
efforts. Heavier, tighter weight ranges,
genetics, timing of shipments, etc., are
but a few of the items.
Trucking of hogs should become
more competitive and efficient.
Gary Van Loon
Summary of the Preliminary Report
November 1991
A committee examining the way
market hogs are sold in Ontario is rec-
ommending some additions to the cur-
rent selling system. After taking a close
look at the major issues facing the indus-
try, they are also recommending against
some other possible changes.
Formed by the Ontario Pork
Producers Marketing Board,
the committee is saying yes to
three points and no to another
three.
Yes:
• Allow producers and pack-
ers to enter marketing agree-
ments to satisfy market niches.
• Update the present system
for selling hogs; keep an auction for
hogs, and the pooling of retums, and
change point of ownership transfer.
• Support the idea of having a long
term slaughter industry in Ontario.
Packers will be encouraged to pay equi-
tably for hogs that will more closely
meet their specifications.
No:
• Make changes to the board structure.
This issue was not a part of the commit-
tee's mandate. There are other mecha-
nisms for handling this issue.
• Start new kill and chill plant. On-
tario already has excess slaughter ca-
pacity.
60 THE RURAL VOICE
• Contract custom kill and chill
through arrangements between OPPMB
and independent slaughterers. This
option is less efficient than the systems
already in place.
The committee, comprised of pro-
ducers, board members, and OPPMB
staff, was formed following the March,
1991 annual meeting. Its tasks are to: 1.
Examine and review all aspects of the
hog marketing and distribution system.
2. Find ways of increasing the returns to
Ontario hog producers.
In arriving at their recommenda-
tions, the committee studied nine main
issues: producer returns, selling op-
tions, pooling, commitment to Ontario
packers, grading grid changes, kill and
chill plants, countervail and tripartite
stabilization for hogs, importing live
U.S. hogs, and the board structure.
The committee consulted with pro-
ducers, packers, government, academ-
ics, and other provincial boards. They
and is for the OPPMB to investigate all
opportunities to work with Ontario
packers in developing pork markets in
the U.S.
The five recommendations for an
improved marketing system include
three options for selling hogs: direct
producer -packer alliances, sorted pool,
and standard pool. These recommenda-
tions are supported by two others. The
first is to continue with the current auc-
tion system, as it is still the best price
discovery system available. It is also an
efficient system for allocating hogs
among packers. The second is to change
a condition of sale. The "F.O.B. selling
point" should be changed from the as-
sembly yard to the packing plant. Under
this recommendation, a freight sur-
charge is to be added to the cost of each
load of hogs. The amount of surcharge
would depend upon the location of the
packing plant.
The three selling options will pro-
vide greater flexibility in the
marketing system to meet the
specific needs of packers. The
direct producer -packer alliances
will allow producers to make
agreements with packers any-
where in North America. The
sorted pool will offer loads of
hogs that have been sorted by the
producer. The desired carcass
weight range is 75 to 90 kilo-
grams, and a new grading table will be
prepared for these hogs. All hogs in this
pool will be booked in by the producer
and then sold by the board before the
hogs are trucked from the farm. The
standard pool will allow producers to
market their hogs as they have always
done. For all three options the OPPMB
will maintain an active role in gathering
and publishing market information.
The committee's preliminary report
is to be discussed with OPPMB council-
lors at a series of regional meetings to be
held during November. A final report
will then be prepared for submission to
the OPPMB on December 12.
"A final report will be
prepared for submission
to the OPPMB
on December 12."
also held three public meetings and
received 33 presentations from 10
county organizations, 21 individuals,
and two industry groups.
Seven recommendations are made
by the committee for improving the
marketing of hogs in Ontario. Two of
them are related to the development of
the U.S. markets for pork. The first is
that a full investigation be conducted of
the net benefits to producers of the Tri-
partite Stabilization Program for hogs.
It is possible that the burden of counter-
vail duties on both pork and live hogs
can be eliminated by the use of alternate
forms of government support. The sec-