Confidence in Long Term Viability of Pork Production

CANADA - Despite one of the most serious economic crisis ever to confront Canadian pork producers, industry leaders remain convinced of the long term viability of the industry, Bruce Cochrane.
calendar icon 22 January 2008
clock icon 3 minute read

The combination of a strong Canadian dollar, soaring feed costs and low returns on finished hogs brought on by an over supply has created a perfect storm for Canadian hog producers.

As a result, industry leaders have been working with government to develop programs to help producers survive the transition to what's expected to become a more streamlined Canadian pork industry.

Canadian Pork Council president Clare Schlegel assured those on hand for Friday's closing session of the Banff Pork Seminar prices will improve.

Clare Schlegel-Canadian Pork Council

Unfortunately in the short term, up until summertime, it looks like prices are going to continue to be significantly below our costs and we shouldn't stick our heads in the sand.

It means that we have to do our planning, we need to figure out where are we going to be able to get money from to continue to operate.

Longer term I think there is some good news at the end of the rainbow here.

We do believe just as it happened in China, just as it's happening various other places, such as in the grain market, that there's going to be probably a massive spike and a big price increase.

There's significant liquidation that started not only in Canada but the U.S., in Europe, in Australia and other places around the world and thus I think we can have faith in supply and demand and that long term it will work out.

Schlegel believes the situation is a crisis of confidence as well as an economic crisis and suggests its appropriate for government to play a role in creating a stable business environment where risks are mitigated to a degree through the transition.

He says there's no two ways about it, the Canadian herd is decreasing, as producers make the difficult decision of whether to reinvest or exit the industry.

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