Alberta Pork AGM
Alberta hog producers have a long way to go before they feel the benefit of stronger hog prices and softening feed costs, Alberta Pork leaders told a packed house for their annual general meeting in Calgary on Nov. 14.
Chairman Frank Novak and executive director Darcy Fitzgerald both updated producers on where their industry has been and where it's heading.
While the outlook right now is fairly optimistic, producers have a lot of lost ground to cover, said Novak.
"The volatility we see in this industry, of course, is probably second to none, short of trading cocoa or something like that in Chicago," he said.
"The interesting thing of course for us, because we are margin players, is what's left after we buy our feed, which is our biggest input cost."
Current trends on the feed cost side are encouraging, but are potential only, said Novak.
Looking at what's happened since 2008, producers have lost about $2,000 in equity per sow, he said.
"It's no great wonder why we've lost such a big chunk of our industry. Basically, these last five years have wiped out the balance sheet.
"So now, when people say you must be quite happy because things look really good ... if you do the math, I need about four years of $20 a pig to get back what I had in 2007."
Producers have not just been working for free, said Novak. They've actually been paying to go to work every day.
Government, the public and industry partners therefore need to understand what the balance sheet looks like for producers, he said.
Picking up from his 2012 report, Novak asked producers to look at three key areas: Revenue parity with the United States, competitiveness and risk management.
He reviewed losses of domestic markets, stating that retailers need to become better partners within the pork industry to help identify why those markets are being lost and find ways to promote Canadian pork consumption in Canada.
Alberta producers need the consumer as an ally in dealing with the retailer, he said.
"We know we have a lot of product coming in on terms that don't make a lot of sense economically, which means there are issues with respect to our trade rules and things being followed or not followed."
Addressing competitiveness, Novak said there has been very little change since last year, including discussion of labour issues as well as pending changes in the code of practice concerning sow housing and who will bear the costs of those changes.
"Now, we're talking about trying to grandfather existing operations and the realization that there is no money and there is no willingness to try to find money that doesn't exist to do major changes on things like sow housing.
"It basically won't happen, and it's been a message that we've been trying to get through to people for a long time," he said.
"The line has basically been drawn in the sand on this one. At the end of the day, we cannot and will not carry the freight on this one. We've said it's a market issue. If the retailers want it and the consumers want it, come tell us and pay us and we'll do it."
Looking into 2014 and beyond, Novak said animal rights issues are not going away and that the industry must therefore be prepared to deal with organizations whose goal is to eliminate animal agriculture.
"If we 'win' on the sow stalls, we should be prepared that it will be a call to arms for some of those people, because they will think they had something in the bag and then they will have lost."
Novak reminded Canadian producers that they are still world leaders in the pork industry.
"Despite all the crap we've been through, all the losses we have had, all the good friends we have lost along the way, Canada is still a major player in the world pork industry. We have to remember that and we have to behave like it."
He said Canadian producers have to be aware that the United States is focused on total domination of world markets.
"We have to think about the future and growing and being strong and competing. Quite frankly, I think we can compete well. There's a lot of money, $3.2 billion worth of exports, 70,000 people employed, a $9 billion contribution to the economy."
When we talk to government and we talk to people in the public, we need to tell them this story and make sure they understand that we are important.
"We're smaller than we were, but the people that are left here are as good as anybody in the world. We can compete, we have to compete, we have to be . . . a little bit more aggressive and a little bit more in people's face and say, you know what, we'll play that game and we actually have a chance to win."
Fitzgerald walked AGM attendees through the actions the corporation has taken in the past year and where it is heading in 2014 and beyond, including an overview of Passion for Pork, a public campaign geared at recovering and expanding domestic markets that have fallen off in recent years.
The cost of production for Alberta farmers as of mid-November was at $1.54 per kilogram of live weight, said Fitzgerald. While feed prices have started coming down, it will take some time before producers see the benefits, said Fitzgerald
"The pigs that will benefit from this haven't been born yet," he said.
Fitzgerald played a couple of the video clips produced for the Passion for Pork campaign, which is now into its second year. One of the videos focused on a comment by hog producer Martin Bowman, production director for Verus Swine Management Services and a director at large for Alberta Pork:
"I'm passionate about what I do. I'm a hog producer. I produce food for the world and I'm proud of it." •
— By Brenda Kossowan