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The Huron Expositor, 1988-11-23, Page 4dA - THE HURON EXPOSITOR. NOVEMBER 23, 1988 ro III • V* • 461) 10 3% 3 YEAR ANNUAL A11 Copus!. In,u.ed Within Llmlm. Hetes 5ublect To VedtLCallnn_ / ' I" p'O ' ANNUAL- 10 if ANNUAL 10 g 90OTO 119 'Prnestmer inveatatent & Tax Planning Smut* rase.tment Products .-. hem people you Can rout SEAFORTH 96 Main St., 527-0810 Deus Oren. a. Man Serving Ontario since 1976 with 15 locations tor your convenience tiouteta mead •$ teetaAh Value $1300.00 WITH EVERY $25. PURCHASE A CHANCE TO WIN Draw to be made Dec. 24 THANK YOU To all those who supported me at the polls in the re- cent municipal election. Pat Malone A Victorian Christmas OPEN HOUSE ildebrandl`'F lowers cordially invite everyone to an OPEN HOUSE at the home of Ruth, Steve and Tyler Hildebrand 77 JOHN STREET 12 NOON TO 5:00 RM. Refreshments Served Christmas Decorations For The Entire House SUNDAY, DEC. 4 Hildebrand Flowers 15 Main St. Seaforth 1 Hog producers hard hit by prices How would you feel if someone said you'd have to pay for the privilege of going to work every day? This is basically what has happened to pork producers. With low pork prices and high feed prices, producers are going through some tough times right now. The effects of the markets are being felt by producers across North America, but they can also be seen in the Seaforth area. Small operators are getting out of the business, large operators are cutting back their production and are actually having to pay for each hog they market rather than make a profit. John Bancroft, a farm management specialist with the Ontario Ministry of Agriculture and Food has statistics to show how much feed prices are increasing and how hog prices are dropping. STATISTICS Feed is by far the largest cost in a hog operation, and prices have risen significant- ly. Dry conditions during the summer meant many producers didn't produce as much of their own feed as they would under better conditions, and therefore have to pur- chase more feed at the current high prices. The cost of soybean meal in October 1987 was $325 per metric ton, and the cost in Oc- tober 1988 was $426. Grain corn sold for $96.14 per metric ton in October 1987, and in October 1988 sold for $146. On the other hand, hog prices have dropped. The market hog that sold for $1.73 per kg in October 1987 sold for $1.28 in October 1988. Mr. Bancroft also quotes figures to show the number of hogs going to market is up over one year ago when conditions were more favorable for pork producers. 5.5 per cent more hogs are going to market in On- tario than were last year, the national average is up seven per cent, and 10 per cent more animals are being marketed in the United States. From his information, Mr. Bancroft predicts it will be into spring or summer before producers see a significant change in the value of a market hog. INPUT FROM LOCAL PRODUCERS John Tucsok, manager of Tucker Porc at RR 4 Seaforth, says the current hard times are part of an up and down cycle of supply and demand which producers will always deal with. The hog industry is a free market and there is no supply management. When profit margins are good small producers breed and there gets to be a large supply of animals. Down the road, with the increased supply, the profit margins drop. As a result the small producers can't make a profit and quit, and supply once again drops, and de- mand is therefore increased. Although producers know there will be an end to the current hardships, Mr. Tucsok says there is still definite concern now. "When you have high feed prices at the same time as low commodity prices profits are really squeezed out," he explains. "There's farmers who just can't continue production. I think there's definitely some who are hurting a lot." Tucker Porc is in the business of selling breeding stock, and Mr. Tucsok says he can see the effects the markets have had on business. 527-0505 Gift to Last New books for everyone Here's just a sampling of our Targe selection of books for Christmas giving... NERMN 111E SIXTR TREASURY J o k1. a l� 089 AfRGUS LENDARS Large and colourful. Scenes a Humorous • Animals A Great Gift tor Anyone. From 117.95. •HERMAN'S 6th TREASURY •GARFIELD •CANADIAN LIVING MICROWAVE COOKBOOK •LIFE AFTER HOr < `Y *THE NATURAL HISTORY OF 4 OSE ' FOR"H BEGINNINGS •THE ARCTIC GRAIL •THE ART OF ROBERT BATEMAN •THE ANNE OF GREEN GABLES BOXED SET COUTTS - HALLMARK Large display of •Christmas Cards •Wrapping Paper *Ribbons *Bows •Stuffed Animals *Serviettes In Baskets BOB & BETTY'S "Some customers have gone out of business, another couple are not buying breeding stock and just waiting to see what this will do, and new customers are hard to get because demand is down for breeding stock," he says. Bob Robinson of Vista Villa farms is also in the business of selling breeding stock and producing market hogs. "The short and the long of it is that pro- ducers are losing $40 to $50 per head for every animal they market. That depends on what they include in their costs, but that probably doesn't include labor," he says. Mr. Robinson says it is only in the past month that the real "crunch" has hit the pork producers, but for the past three mon- ths he would estimate producers have been losing $35 to $40 per animal. In the midst of this is the hog tripartite which will provide pork producers with some relief. For over two years many pro- ducers have been paying into the program, and their dollars have been matched by both the provincial and federal governments. Their money is reserved until producer's profits go below 90 per cent of the cost of production, then payments are made from the stabilization program. This payment will be $23 per hog marketed in the current situation. Each of the producers interviewed said the stabilization program would help absorb some of the shock of the poor commodity prices, and could help some producers stay in business who would otherwise go under. But, because these people will keep produc- ing, the cycle of supply and demand will take longer to complete itself, as low market prices will be prolonged by continued overabundant supply. "If you hang in there it'll turn around," assures Mr. Robinson, "but there's some .• people who can't afford to hang around." Neil Murray says it will be producers with 30 to 40 sow herds who will be dropping out. "Once you've got over 100 sows you're. pretty well locked in," he says. Mr. Murray has a 106 sow operation. It was formerly a 125 sow operation, but he has had to cut back. Mr. Murray predicts it will be another year before good times return for pork pro- ducers. A new cropping year will have to begin before feed costs return to an affor- dable level, and he says pork prices general- ly run in a 14 to 15 month cycle. Dave O'Rourke of O'Rourke Transport in Dublin hauls livestock in the Seaforth area and knows the market here. He sees another problem for the pork industry, and that is the strikes at packing plants across the pro- vince. He is hauling hogs to Quebec to be slaughtered instead of to plants in Ontario. He also points out the recent strike has hurt prices. In the beginning of October he says the price for a market hog was $1.31 per kg, and it is $1.17 now. He says tripartite "is a band-aid", but the situation is "gloomy looking". So far, he says the only producers he has seen pack it in are those who have a second income to fall back on. "In our particular business there are smaller operations that aren't finding it worthwhile, but the more established guys are riding the storm. They don't have much choice." Hog farmers can set priorities in tough times BY ANDY SANDE, HURON COUNTY PORK ADVISOR As margins shrink, many hog farmers will undoubtably be facing a certain amount of financial pressure as 1988 draws to a close. When times get tough there are two obvious choices: you either do like the Toronto Blue Jays ie. "stand pat", or you start changing things. Change requires time and energy and can be unpredictable. However, with careful planning, the risk and extra effort can be minimized. In the autumn issue of the "Ontario Hog Farmer", pork producer, Bob Hunsberger, discusses the use of a com- puter to model specific hog operations. He explores the effect of changes in various items such as feed prices, production levels, etc. I would like to borrow a page out of Mr. Hunsberger's book to illustrate a point. Most producers are familiar with Andy Bunn's average 100 sow farrow to finish farm from the Pork News and Views. It would be interesting to see just what this operation would have to change to in- crease net farm income by $5,000. Any one of the following would achieve this: - handle nine more sows in the same facili- ty at the same production level - a price increase of .04/kg in market hogs - a drop in interest rates of 11/2 percent - an extra 1/10 of a litter/sow/year - an increase in live births of .6 pigs/Litter (assume mortality remains constant ) - a 5 percent reduction in pre -weaning mor- tality (from 25 percent to 20 percent) - a 21/2 point improvement in average car- cass index - a reduction in feed consumption in the finishing barn of 13 kg/pig - a reduction in the price for grower feed of $12/tonne (assume feed is of equivalent quality ) - a saving in starter -ration price of $110/tonne 1 assume performance is unaffected) - a reduction in outstanding debt of $40,000 (at 12 percent interest) The list could go on. However, what we have now done is produce a series of alter- natives that we can evaluate. It allows us to effectively set priorities and understand just what aspects of our business are the A computer is a valuable tool in doing most critical. We have almost broken these calculations. Fortunately, you don't down a seemingly impossible task of "im- have to own or operate your own corn - proving production" into manageable puter. The Ontario Ministry of Agriculture bites. In the case above, the effect of feed and Food county staff are available and consumption in the finishing barns would equipped with portable units to allow this be my choice for the place to start. When I type of analysis to be done in your own set it as a priority, I would go to the barn home. Maybe it's time to develop your with the attitude that even if I get nothing strategy for '89. else done today, I will check all the feeders for waste and spoilage. Once that is done I will know that I have addressed one of the most important economic factors on my farm. It would certainly be a better use of my time than phoning three different feed suppliers to save $3/tonne on pig starter. It should be noted that as circumstances change, this list will change. If feed prices were low and pig prices high then all those numbers would be different. This is not an exercise to be done once and forgotten. It is an on-going adjustment to changing times. McCaII Livestock trade active The market at McCall Livestock traded actively on a heavy supply of cattle at sharply higher prices on both steers and heifers. Both stockers, calves, and feeder pigs met a good demand. There were 1269 cattle on offer and 280 pigs. Choice Steers - 88. to 91. with sales to 100.50. Good Steers - 82. to 86. A steer consigned by Maple Emblem Farms of Dungannon, weighing 1190 lb., sold for SEAFORTH MEAT MARKET PORK BUTT CHOPS i .49 LB CHICKEN BREASTS �LB , . 19 BONELESS PORK BUTT ROAST VARIETY $ GIFTS Rad ie lhaek SIAFORTM 827.115110 "YOUR LOTTERY TICKET CENTRE" DEALER A.S.C. OPEN 7 DAYS A WEEK 9 A.M. TILL 11 P.M. MEDIUM GROUND BEEF DELI SLICED COOKED HAM 9 TOP ROUND STEAK B1,79 e1.99 .a3,19 MORE 11414110 111E E FEATU ES! t 5271$21 Chock out trim A te 1 100.50, with their offering of 28 steers averaging 1269 lb., selling for an overall price of 90.96. Nineteen steers consigned by Lorne Forster of RR 1, Lucknow, averaging 1314 lb., sold for an overall price of 87.98, with sales to 91.25. Four steers consigned by Harold Pryce of RR 1, Seaforth, averaging 1230 Ib., sold for an overall price of 87.93, with sales to 93. Seven steers consigned by Jerome Zettler of RR 1, Walkerton, averaging 1287 Ib., sold for an overall price of 87.57. Seven heifers consigned by Glen Sellers of RR 2, Bluevale, averaging 1147 lb., sold for an overall price of 87.64, with sales to 88.75. Fifteen heifers consigned by Ross Fitch of RR 1, Wroxeter, averaging 1151 lb., sold for an overall price of 86.87, with sales to 90.75. Six steers consigned by Earl Fitch of RR 1, Wroxeter, averaging 1275 Ib. sold for an overall price of 86.22, with a sale to 89. Twenty-eight heifers consigned by Glen Johnston of RR 2, Bluevale, averaging 1046 lb., sold for an overall price of 86.20, with sales to 91. Thirty-three heifers consigned by Elwood Fitch of RR 1, Wroxeter, averaging 1102 ib., sold for an overall price of 85.58, with sales to 88.75. Twenty heifers consigned by Schultz Bros. of RR 3, Blyth, averaging 1019 lb., sold for an overall price of 85.73, with sales to 91.75. Choice Heifers - 84. to 88. with sales to 98.25. Good Heifers - 80. to 84. Choice Cows - 54. to 59. with heifery types to 67.75. Goed Cows - 50. to 54. Canners & Cutters - 44. to 50. Heavy bulls traded to a high of 80. 20-30 Ib. pigs traded to a high of .63 per ib. 30-40 Ib. pigs traded to a high of .61 per lb. 40501b. pigs traded to a high of .56 per lb. 50-60 Ib. pigs traded to a high of .60 per Ib. 60-70 Ib. pigs traded to a high of .57 per lb. b