Piglet Kill Proposed to Solve Hog Woes
Posted: Mon Apr 14, 2008 10:31 amPiglet Kill Proposed to Solve Hog Woes
Column # 666 14/04/08
by Paul Beingessner
In virtually every farming enterprise, farms are getting larger. One factor that has driven this is the ever-declining value of the commodities farms produce. In constant dollars, the value of farm products, whether grain, livestock or Christmas tree has not kept up with every other cost farmers face. Farmers have survived by producing more of those products per farm. So farms get bigger and rural communities smaller.
If production were simply a matter of management, good farmers would survive by getting larger. The less productive would fall by the wayside. But it isn't that simple. A major reason is the incredible unpredictability of both weather and prices. If you're losing money due to low prices or poor production, being big is likely a greater problem than being small.
The other problem with bigness is that everyone is on the same bandwagon. The result is the consolidation of grain companies, chemical and seed companies, machinery manufacturers and even input retailers. Even the biggest farmer is no match for a Monsanto, Cargill or CP.
Nowhere can the problems of bigness be more clearly seen than in the hog industry. At some point in the last century, governments and policy makers became convinced there was an unlimited market in the world for pigs. The rational was that as poorer countries developed, meat consumption would rise, and since hogs and chickens are cheaper to raise than cattle, they would be the ones in greatest demand. Policy makers began to push hog production. Provincial governments all had their own units within their departments of agriculture dedicated largely to increasing the number of hogs produced in the province. Pigs would eat the cheap feed grains. Pigs, which can breed like rabbits, could build populations rapidly. Canadian pigs would be travelling the world. Raise enough pigs and the processing facilities would come.
There were several problems with the whole scenario. Large hog barns could indeed produce hogs cheaply. So cheaply, in fact, that soon small producers were unable to cope with the ever-falling prices. They did what hog producers have always done when markets fell. They went out of pigs. The large ones left didn't respond to market signals in the same way. They couldn't afford to shut down or limit production, thus ensuring perpetually low prices. (Truth be told, low hog prices have hurt the beef industry as well, as hogs compete in the supermarket with beef and limit its price.)
As for Canadian pigs travelling the world, it turned out most of them only made it to the U.S. As in the beef industry, Canada became fixated on selling our pigs to a country swimming in pigs itself. That we were able to do so was largely because of our low dollar, not some mythical notion of western Canada as the "lowest cost producer".
If current and past hog prices weren't enough to make you weep, the impending closure of the American border to hogs due to Country of Origin Labelling (COOL) should have hog producers everywhere sobbing. Labelling hogs as products of somewhere other than the U.S. is expected to lower their value, so American slaughter plants have also said they will not slaughter Canadian hogs under COOL. Just the fact that COOL appears to be coming this fall has whacked Manitoba's isowean producers on the snout. Isoweans are early-weaned piglets, many of which are finished in the U.S. Those for sale now might not finish before COOL is implemented, so some American finishers have broken contracts to buy Manitoba piglets. Prices for isoweans have dropped as much as 90 percent.
Canada now has a program to pay hog producers to kill sows and boars and stop producing pigs. Manitoba producers are calling for a similar program to kill piglets, saying a 4 percent reduction in supply would help to increase prices.
The entire situation is both sad and revolting, especially the waste of good food and the destruction of baby animals. The heyday of this latest surge in the hog industry lasted scarcely more than a decade for many producers. Some of the earliest barns were closing their doors due to bankruptcy as the last barns were being built. Whatever the outcome, there will be a major correction in hog numbers, especially in western Canada.
No one should be surprised. The market for pigs in Manitoba and Saskatchewan is for about 300,000 hogs per year. We are producing five million, and trying to export most of the surplus to the U.S., a country that is awash in hogs itself, and remarkably protectionist. It is as absurd as Canadian farmers who think that without the CWB, we could pour our grain into the American's premium priced domestic market.
The ultimate irony is that while the industry is near collapse, Manitoba's hog producers are up in arms because the provincial government won't allow any new hogs barns to be built due to environmental concerns.
So, let's tally it up.
At one time we had a hog industry with thousands of small players who sold to a variety of packing plants. These farmers responded to market signals and were able to move in and out of the industry because their capital investment was often small and they were diversified. Hog prices were low, so focus on the grain side. Hogs rise, re-open the barn.
Now we have government subsidies to kill pigs large and small and dispose of them. Packing plants closing in western Canada while the hog supply grows. Small producers all driven out of the business. A bunch of much fancier empty barns than the last time this happened. And government agencies that still have a mandate, I'll bet you anything, to expand the hog industry in western Canada.
They say pigs are the smartest animal in the barnyard. I'm beginning to think they could well be smarter than a lot of humans.
© Paul Beingessner (306) 868-4734 phone 868-2009 fax beingessner@sasktel.net
Column # 666 14/04/08
by Paul Beingessner
In virtually every farming enterprise, farms are getting larger. One factor that has driven this is the ever-declining value of the commodities farms produce. In constant dollars, the value of farm products, whether grain, livestock or Christmas tree has not kept up with every other cost farmers face. Farmers have survived by producing more of those products per farm. So farms get bigger and rural communities smaller.
If production were simply a matter of management, good farmers would survive by getting larger. The less productive would fall by the wayside. But it isn't that simple. A major reason is the incredible unpredictability of both weather and prices. If you're losing money due to low prices or poor production, being big is likely a greater problem than being small.
The other problem with bigness is that everyone is on the same bandwagon. The result is the consolidation of grain companies, chemical and seed companies, machinery manufacturers and even input retailers. Even the biggest farmer is no match for a Monsanto, Cargill or CP.
Nowhere can the problems of bigness be more clearly seen than in the hog industry. At some point in the last century, governments and policy makers became convinced there was an unlimited market in the world for pigs. The rational was that as poorer countries developed, meat consumption would rise, and since hogs and chickens are cheaper to raise than cattle, they would be the ones in greatest demand. Policy makers began to push hog production. Provincial governments all had their own units within their departments of agriculture dedicated largely to increasing the number of hogs produced in the province. Pigs would eat the cheap feed grains. Pigs, which can breed like rabbits, could build populations rapidly. Canadian pigs would be travelling the world. Raise enough pigs and the processing facilities would come.
There were several problems with the whole scenario. Large hog barns could indeed produce hogs cheaply. So cheaply, in fact, that soon small producers were unable to cope with the ever-falling prices. They did what hog producers have always done when markets fell. They went out of pigs. The large ones left didn't respond to market signals in the same way. They couldn't afford to shut down or limit production, thus ensuring perpetually low prices. (Truth be told, low hog prices have hurt the beef industry as well, as hogs compete in the supermarket with beef and limit its price.)
As for Canadian pigs travelling the world, it turned out most of them only made it to the U.S. As in the beef industry, Canada became fixated on selling our pigs to a country swimming in pigs itself. That we were able to do so was largely because of our low dollar, not some mythical notion of western Canada as the "lowest cost producer".
If current and past hog prices weren't enough to make you weep, the impending closure of the American border to hogs due to Country of Origin Labelling (COOL) should have hog producers everywhere sobbing. Labelling hogs as products of somewhere other than the U.S. is expected to lower their value, so American slaughter plants have also said they will not slaughter Canadian hogs under COOL. Just the fact that COOL appears to be coming this fall has whacked Manitoba's isowean producers on the snout. Isoweans are early-weaned piglets, many of which are finished in the U.S. Those for sale now might not finish before COOL is implemented, so some American finishers have broken contracts to buy Manitoba piglets. Prices for isoweans have dropped as much as 90 percent.
Canada now has a program to pay hog producers to kill sows and boars and stop producing pigs. Manitoba producers are calling for a similar program to kill piglets, saying a 4 percent reduction in supply would help to increase prices.
The entire situation is both sad and revolting, especially the waste of good food and the destruction of baby animals. The heyday of this latest surge in the hog industry lasted scarcely more than a decade for many producers. Some of the earliest barns were closing their doors due to bankruptcy as the last barns were being built. Whatever the outcome, there will be a major correction in hog numbers, especially in western Canada.
No one should be surprised. The market for pigs in Manitoba and Saskatchewan is for about 300,000 hogs per year. We are producing five million, and trying to export most of the surplus to the U.S., a country that is awash in hogs itself, and remarkably protectionist. It is as absurd as Canadian farmers who think that without the CWB, we could pour our grain into the American's premium priced domestic market.
The ultimate irony is that while the industry is near collapse, Manitoba's hog producers are up in arms because the provincial government won't allow any new hogs barns to be built due to environmental concerns.
So, let's tally it up.
At one time we had a hog industry with thousands of small players who sold to a variety of packing plants. These farmers responded to market signals and were able to move in and out of the industry because their capital investment was often small and they were diversified. Hog prices were low, so focus on the grain side. Hogs rise, re-open the barn.
Now we have government subsidies to kill pigs large and small and dispose of them. Packing plants closing in western Canada while the hog supply grows. Small producers all driven out of the business. A bunch of much fancier empty barns than the last time this happened. And government agencies that still have a mandate, I'll bet you anything, to expand the hog industry in western Canada.
They say pigs are the smartest animal in the barnyard. I'm beginning to think they could well be smarter than a lot of humans.
© Paul Beingessner (306) 868-4734 phone 868-2009 fax beingessner@sasktel.net