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Saskatchewan Pork Producers Solidly Behind Efforts to Maintain Provincial Slaughter Capacity

by 5m Editor
16 December 2006, at 11:02am

CANADA - Farm-Scape: Episode 2267. Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council and Sask Pork.

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Farm-Scape, Episode 2267

Saskatchewan’s hog producers have given their provincial producer organization an overwhelming mandate to move forward on their behalf with efforts to maintain primary processing capacity within the province.

Pending Slaughter Plant Closure Prompts Action

The action is in response to an October decision by Maple Leaf Foods to cancel plans to build a new slaughter facility in Saskatoon and close the Mitchell’s Gourmet Foods facility within three years to clear the way for double shifting the company's Brandon facility.

The Maple Leaf announcement, which resulted in an immediate flood of calls to the Saskatchewan Pork Development Board from producers expressing their concern, prompted a special meeting November 27 that attracted about 130 producers to discuss the issue. Those on hand were given a letter which asked them to choose one of three possible courses of action that could be taken by the Saskatchewan Pork Development Board.

The options included: Sask Pork leave the matter alone and allow the market to dictate; that it be left up to producers to find alternative capacity without involvement from Sask Pork; that Sask Pork develop a business plan, assemble capital if necessary and seek out a marketing partner to move forward with building a primary processing plant in Saskatchewan.

Vast Majority Support Efforts to Maintain Processing Capacity

“Well over 80 percent of the respondents were positive, that they wanted to move forward to build a plant,“ states Saskatchewan Pork Development Board general manager Neil Ketilson.

Of those who have responded to the survey, he notes the majority support the concept of moving ahead with finding a solution, finding a marketing partner and building a new plant if that’s what’s required in Saskatchewan.

Producer Involvement Seen as the Way of the Future

“When one packing plant after another across Canada seems to be closing all of a sudden there’s way too many pigs without a home,“ observes Rosetown area producer Joe Kleinsasser.

Kleinsasser, the vice-chair of Sask Pork, is a member of Rosetown Colony which operates a 360 to 380 sow farrow to finish unit. His biggest concern, and the biggest concern of those he has talked to, relates to a potential lack of market access.

“We don’t want to be phoning up people every week and begging them to take our pigs and taking what they’re going to give us,“ he says.

If plans to double shift the Maple Leaf plant in Brandon and the Olymel plant in Red Deer were guaranteed, there would be a little less urgency, he admits. But, he points out, those plans have been in the works for years and the logistics certainly haven’t become any easier and infrastructure costs haven’t become any less.

The Rosetown Colony, located about 80 miles from Saskatoon, ships an average an average of 170 pigs a week. Kleinsasser doesn't see a lot of economic sense in going much further. He recalls he was told a year ago that producer owned packing plants were what the future is going to look like and that future appears to have arrived. He admits, in a perfect world, producers would not want to be involved in a packing plant but he believes the writing is on the wall and that they have to do something or close their barns.

Survey Results Provide Strong Mandate to Move Forward

Sask Pork Chair Shirley Voldeng views the results of the survey as very important. “It shows the commitment level and seriousness that the producers are seeing in this situation and how much they’re willing to commit to moving forward with this.“

Saskatchewan Government Confident in Industry's Viability

The provincial government remains solidly behind the producers efforts. “Certainly we’ve been working very closely with producers as they've been looking at how to respond to Maple Leaf’s announcement that they were shutting down their slaughter facility here,“ says Provincial Agriculture and Food Minister Mark Wartman.

He notes the provincial meat strategy, which provides some capital support, is currently being reviewed with one of the questions being how to engage producer involvement.

As for possible levels of support that might be available, Wartman says it would be premature to speculate on that at this point however he notes, “I can say that under our meat strategy 15 percent of capital costs would be covered. But we’re exploring other ways that we might facilitate and enable, particularly, producer operations.“

Premier Lorne Calvert stresses the Maple Leaf decision to reduce its presence in Saskatchewan doesn’t change the province’s desire to expand both production and processing or its readiness to work with the industry.

“We are still very anxious to see increased processing opportunities, develop new market opportunities and to support the new market, the new processing and of course expanded production,“ Calvert says.

“Given some of the natural advantages, given some of the labor force advantages, given the cost of living advantages that we have, given our reach into the world to bring new workers into the province and given the determination of the players here I have a lot of optimism.“

Wartman adds that because of the province’s geology, its large feed supply and ability to grow significant amounts of feed, the ability to expand the hog industry is quite significant and there are some fairly aggressive plans in terms of that.

“We’re about 2.5 million right now and we can see, being very very environmentally responsible looking at where we’re spreading the manure and how, that we could move up to as many as 10 million and still have significant opportunity to grow.“

He believes, “In the long run, if we get a very good producer and industry driven base and have an experienced company that’s involved as well, we’ll have the best of both worlds and we should see a very strong slaughter industry be able to move forward.“

Potential Marketing Partners Expressing Interest

Although she is not at liberty to disclose details, Voldeng confirms, “There have been potential partners coming forward expressing interest.“ They see that the pigs are there and there is some opportunity, she says.

Process Being Fast Tracked

Sask Pork’s board of directors will meet within the next month to determine direction in terms of next steps.

“We’d like to move as quickly as we possibly can,“ Ketilson says. “We’d really like to have the core part of the business deal struck as early this winter as we possibly can.“

He suggests, “Next steps will need to include identifying a marketing partner that’s interested in coming to Saskatchewan, one that has recognizable trade names, one that has a good market niche already and one that has the potential to help grow the business. The second the thing we need to do is secure financing if that's required, or put the capital requirements together to do that. The third would be to do our due diligence in terms of putting the business plan together.“

Once the fine details of the business plan have been completed producers will be presented a contract and be asked to make a final decision on whether or not they plan to participate.

Staff Farmscape.Ca

5m Editor