The Rural Voice, 1999-03, Page 48capital," he said of the proposal first
brought forward by Ken Palin of
Kenpal at a meeting in Exeter in
January.
Van Bakel said while for weeks
there had been no feeling anything
was changing, at the Exeter meeting
"It felt like there was some hope of
doing something."
Association president John
Nyenhuis said it was important to
keep as many of the smaller
processors in business as possible.
Most, he noted are family operations.
"They're like the family farm."
In addition, he said, the checkoff
could help provide funding for the
Progressive Pork Producers proposed
plant in London.
Producers also supported a
resolution calling on Ontario Pork to
take control of all contracts, despite
some hesitation.
One speaker likened the situation
with pork producers to a labour
union, wondered how effective a
union would be if each member
negotiated his own contract
individually. Ontario Pork would be
in a much stronger position to
negotiate if it controlled all hogs in
the province, he said.
Kevin O'Rourke said having
Ontario Pork take over contracting
for all producers would help avoid a
future situation that might see
producers competing against each
other for contracts and driving the
price down.
Harry Bardoel said contracts cause
a problem of price transparency. "We
don't know what is going on (with
prices)", he said.
Also supported, by a tight margin
of 34-30, was a resolution, proposed
by Matt Marui, calling on Ontario
Pork to work toward finding a truer
Ontario price for hogs, perhaps using
a cost of production formula.
In supporting the resolution, Larry
Skinner said it is an attempt to get
Ontario Pork to look at other pricing
models. The Ontario auction is no
longer functioning and perhaps the
Indiana/Illinois price, on which the
current formula is based, is not a
good base for Ontario.
Skinner proposed a resolution
calling on Ontario Pork to explore
44 THE RURAL VOICE
News
methods of selling that would capture
more of the retail dollar at the
producer level. Over many years,
producer margins have been
dropping while wholesale and retail
levels have been increasing, he said.
He wondered if some benchmarks
could be found to relate the producer
price to retail prices for some cuts.
"Perhaps we wouldn't always see
our portion (of the price) go down
and be expected to try to recover by
producing more," he said.
Other resolutions passed included
those calling on other farm
organizations to speak about pork
issues through Ontario Pork; one
calling on settlement of futures
contracts in the same month as the
sale; an exploration of a way to let
weaner producers forward contract
their pigs and one that would have
Ontario Pork develop a contract
under which a producer can forward
contract hogs at a locked in basis, as
is the case with corn or soybeans.
A resolution calling on a one-year
government moratorium on all new
construction of hog barns was
defeated as was one calling for
Ontario Pork to develop new
contracts based on recovering cost of
production plus a profit, a move
some producers felt would be an
invitation to increase production.
John Crowley, in his last report as a
director on the pork board from Perth
County, challenged the Ontario
government to support the Ontario
pork industry by backing an industry
coalition putting together a loan
program for hard-hit farmers. Other
partners in the industry have agreed
on the program but require the
government to provide loan
guarantees for the minority of loans
that might go bad.
The loan program would act like a
floor price, Crowley said, kicking in
when the price goes below $1.20 per
kilogram and being repaid when
prices are over $1.40.
Crowley remarked on the
tremendous variation in prices he had
seen in his four years on the board,
peaking at $2.20 per kg. and crashing
to 36 cents.
In his address, outgoing president
John Nyenhuis said the happenings
of the fall of 1998 were "the kind of
history you wish you had only read
about and not had to live through".
He hoped the pork industry would
have the foresight to put measures in
place to keep similar collapses from
happening in the future. Yet
companies involved in vertical
integration of the industry are still
expanding and buying and shutting
down small processors, he said.
"I believe the North American
integration movement has to be the
scariest problem we face," he said.
While pork prices hit devastating
lows, there did not seem to be a
backlog of pork and he wondered
who had made all the money the
farmers had lost.
The challenge for the industry is to
support the independent family farm
because if the independent farms do
well the large operators will too,
Nyenhuis said. He warned that if a
similar downturn happened again
large contract operators will be hurt
too because if Ontario Pork doesn't
provide an alternative, the price of
contracts will go down.0
Brighter days
forecast for beef,
hogs, not for crops
Prospects for beef and pork
producers should improve in 1999
but few bright spots are on the
horizon for corn and soybean
producers according to a futures
manager with RBC Dominion
Securities.
Speaking at the Royal Bank's
annual agricultural outlook meeting
in Chesley, February 3, George
Cornell, futures product manager said
by mid-February another 150,000
hogs a week might be removed from
the North American market because
of shrinking herd sizes. By March, he
said, the U.S. breeding herd should
be down by eight per cent.
However, he warned, prices might
drop lower before they go higher.
Packers have had record profit levels,
he said and if the cash market goes
up it would cut into their margins so
they may not be willing to increase
prices quickly. However, by next