When you ask Andrew Dickson about the possibilities for the pork industry in 2009 you get the feeling there is light at the end of the tunnel. Dickson is the General Manager of the Manitoba Pork Council and he says things look brighter than they did a year ago.
“We entered 2008 with record high feed prices and low prices for our product,” says Dickson. “There were times in the year that there was absolutely no market for weanlings, so things look better than they did through the year.”
He cites the impact of American Country of Origin Labeling as one of the major factors of the last calendar.
“There was also the increase in the value of the Canadian dollar that reached a high of 1.08 American and that was devastating for our industry,” he says. “There was the provincial policy regarding the hog industry and Bill 17.”
He says that heading in to 2009, the lower value Canadian dollar is a positive marker for the hog industry, but it is not an all-encompassing solution.
“We have had a number of smaller barns closed and we are not sure that they will re-open,” says Dickson. “The larger barns stayed producing through the low spots even when there were times of negative margins.”
He acknowledges that there are some operations that are surviving because the returns from the grain industry subsidized the hog operations, and he looks at it philosophically.
“There were many times it went the other way,” he says. “People forget how much land hogs have paid for. They have been called the mortgage burner for a reason.” He does not expect a sector to stand on its own through all times.
“The hog industry has provided a market for a lot of feed grains and it has a value because of it,” says Dickson.
He estimates that about 20 percent of barley grown in Manitoba is selected for malt, and says, “Growers try for the premium but when it doesn’t happen they sell the barley into the hog industry and are able to continue in the grain industry. They could not exist growing barley if they could only sell one crop in five.”
He says the American market has again strengthened for Manitoba weanlings.
“We are at the point where there are about 100,000 weanlings a week heading to the U.S. There was a time this year that was non-existent so things are better now,” he says. He estimates that numbers hit 140,000 a week at the height of exports.
Dickson credits high fertilizer prices for the increased demand for weanlings.
“The corn crop was late in the U.S. and prices have fallen, producers are now thinking about feeding hogs and putting the manure on the field for next year’s corn crop,” he says. “American farmers are convinced they see a yield advantage with manure over commercial fertilizer and with the current price situation it makes sense for them to feed hogs.”
The factors of a lower Canadian dollar, high fertilizer and lower hog numbers all contribute to an expanding market for Canadian weanlings.
The Manitoba Pork Council plans to take part in two trade shows in Minnesota and Iowa early in the new year to promote Manitoba weanlings.
“We are in a better position than a year ago,” he says. “But we need our currency to stay where it is and no major event to rock the boat.”
