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Packing Capacity Remains Priority in Saskatchewan

by 5m Editor
11 January 2010, at 11:30am

SASKATCHEWAN, CANADA - The new chair of the Saskatchewan Pork Development Board says access to processing capacity remains a key issue within the Saskatchewan pork industry, writes Bruce Cochrane.

Canadian pork producers have contended with three years of losses brought on by a combination of factors including an over supply of hogs, high feed costs, the value of the Canadian dollar, the impact of the global recession and fall-out from H1N1.

Jay McGrath, the general manager of a 2,500-sow farrow-to-finish operation at Leroy, was elected chair of the Saskatchewan Pork Development Board last month.

Mr McGrath notes producers in Saskatchewan have faced some unique additional challenges.

Jay McGrath – Saskatchewan Pork Development Board

Saskatchewan has taken a real hit as far as the bigger producers are concerned.

There's no packer in Saskatchewan.

That's definitely a concern so transportation costs are higher.

That would be the big difference and there is a lot of companies that have shut the doors and the herd is shrinking.

It's very concerning.

I think, as far as over the next two years, I really think the days of the high profits are not going to be with us anymore.

I think people are going to be doing a lot better job at risk management and, if there's dollars to be made, locking in those prices and also on the other end when we're in a downturn is limiting the risk and trying to balance out the year.

People have went through losing huge dollars per hog and obviously the outcome of that is a lot of people went out of business so people are definitely going to try to limit that risk going forward.


Mr McGrath observes hog prices are on their way back up and, while producers are taking a wait and see attitude for 2010, there are fewer animals out there and the next two years should see continued improvement.

He says packing capacity remains a key issue in Saskatchewan and figuring out a way of securing packing services to reduce transportation costs remains a priority.