Economic Turnaround in 2009 Expected

by 5m Editor
20 November 2008, at 11:12am

CANADA - Saskatchewan Pork Producers are confident the worst of the economic crisis facing them has now passed, writes Bruce Cochrane.

Members of the Saskatchewan Pork Development Board held their annual meeting yesterday in Saskatoon.

Board chair Neil Ketilson says increased feed costs due to ethanol and the high Canadian dollar driven by strong oil prices coupled with the loss of the province's packing plant have meant for difficult times.

Neil Ketilson-Saskatchewan Pork Development Board

We think we're coming through the end of the two year cycle.

I think a lot of people in this business appreciate that there's been a four year cycle where there's two years of ups and downs and very difficult times for producers and then the following two years are really quite lucrative.

We think we're through the worst of it.

The currency issue that was at near par is now down to 81 cents which is a 20 some percentage change in price right away.

You look at the feed grain prices, and we had a good crop in Saskatchewan here, they had a good crop around the world.

Barley that used to cost six dollars a bushel is now down to around three.

We have reduced our cost of feed, for an example, from over 100 dollars per animal to around 60 so we've seen some very significant things in terms of assistance on the price side as well as a very significant reduction on the cost side.

We think that the second quarter of '09 is going to be much much better.

That coupled with the decrease in price is looking very favourably.

The caveat to all that is how is the meltdown on the economic world, both in the stock market and the financial crush, going to impact our market.

Yet to be determined but certainly we anticipate '09 is going to be better.

Ketilson notes negative margins over the past 18 months have ranged from break even to 50 dollars a head.

He estimates the Saskatchewan industry has lost abut 100 million dollars.

5m Editor