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The Rural Voice, 1998-07, Page 57PERTH County Pork Producers NEWSLETTER John Nyenhuis, President 519-393-6539 • The Rural Voice is provided to Perth County Pork Producers by the PCPPA Ontario pork producers among the world's most productive Any opinions expressed herein may not necessarily reflect the views of the Perth County Pork Producers' Association. Ontario Pork 'commissioned a study to assess the competitiveness of the Ontario pork industry. The study was conducted by GREPA, which is involved with agricultural economics at Laval University in Quebec. The study had two objectives: 1) to establish benchmarks from which to measure progress, and 2) develop a starting point from which to make changes to increase the Ontario pork industry's competitiveness. The study analyzed the competitiveness of each of the three sectors of the industry: production, processing and marketing. As far as the production sector was concerned, the study concluded that Ontario producers are among the most productive in North America. For example, we lead in the number of live- born piglets, number weaned per sow and per year, and in low weaner mortality. Finishing data suggests that average daily gain, quality, and mortality are competitive. The average size of Ontario farms is the smallest in North America, which would suggest that our farms would have higher fixed costs, but it does not appear to be so. There was no proof found by the study team to suggest that Ontario farms are any less productive than our competitors. The study also concluded that Ontario feed costs are lower than North Carolina and Quebec, but slightly higher than the American Com Belt. The processing industry has contracted from 13 main slaughterhouses in the early 1980s to three in 1997. The study pointed out many factors Ontario producers are well aware of concerning the packing industry. Ontario packers are fairly small compared to their American counterparts, which gives them smaller economies of scale. Throughput is further reduced because Ontario hogs are slaughtered at lighter weights than in the U.S. Equipment utilization rates, currently running at about 75 per cent, are too low and cause higher costs even though about 20 per cent of Ontario hogs are exported out of province. This situation has the processing plants caught in a vicious cycle, with costs too high to allow for more competitive bidding of supply and more reinvestment into new equipment. When the study team analyzed marketing organization in Europe, especially in Denmark and Holland, they found a very highly developed spirit of co-operation. In the U.S., large producers are also organizing to meet export demands and various market requirements. Smaller U.S. producers are attempting to group together, imitating large producers. In Ontario and Canada as a whole, the trend is moving the other way. In several provinces, provincial pork boards have given up or had their powers removed for producers to go out on their own, at the same time as other parts of the world are getting more organized. Ontario's Task Force on marketing suggests removing some of the powers of Ontario Pork and allowing other means of selling hogs as the constraints of marketing boards seem to be unacceptable by some producers. However, the GREPA study suggests that marketing boards seem to organize in regions known for the quality of their products and marketing efficiency, for example, Denmark. It also states that some Ontario producers are demanding we relinquish our centralized marketing structure and adapt it to allow producers more of an American-style independence, an independence which other North American and European producers are giving up. If these observations are true, then the Ontario industry needs to ensure that any changes made to its marketing structure benefit our industry as a whole, and don't just satisfy some individual interests. Some of the recommendations offered by the report have long been recognized by the Ontario industry, but are not always acted upon in a timely manner. Improved transmission of information of market requirements to producers so they can adjust and respond to market trends is required to maintain our quality edge. Environ- mental issues are a major threat to the advancement of our industry, but the report states that the smaller size of our operations is a great asset in this regard. The main problem which needs to be dealt with in the processing segment is the underutilization of slaughter capacities. Efficiency can be increased in thc plants by going to double shifts and investing in new equipment. Processors are not capturing the full value of offal and other by-products of slaughter, thereby reducing the revenues received for the hogs purchased. This makes them less competitive. Adjusting the price grids to capture the hogs being exported to the competition will also address the problem of short supply. Committing supply to packers on a longer term basis would encourage price stability and allow packers to invest in their facilities. (The Pool Plus program is a positive move in this regard.) For our Ontario industry to move ahead, producers and processors must stop blaming each other for the problems in the industry, and realize that a confrontational attitude will fail to bring about positive change in this fiercely competitive industry. We must forget past mistakes, and begin to trust each other as partners. Only then will we sec our industry take its fair share of thc world pork market.0 Submitted by Jim Van Ilerk PERTH COUNTY PORK PRODUCERS' GOLF TOURNAMENT Mitchell Golf Course August 19, 1998 Contact Joanne Groenestege for more details 519-393-5532 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 • Vittono's BBQ Sauce AVAILABLE FROM: Fred de Martines (Sebr.) 393-6812 Martin van Bakel (Dublin) 347-2666 Walter Bosch (Monkton) 356-9000 Ted Keller (Mitchell) 348-9836 JULY 1998 53