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Pork Producers Forced to Cut Product Costs

by 5m Editor
5 February 2010, at 1:25pm

CANADA - The Chair of Manitoba Pork Council says tightening margins over the past 25 years have forced pork producers to cut production costs in every way they can, writes Bruce Cochrane.

"Pig industry challenges over the past 25 years" was among the topics discussed during the 2010 Manitoba Swine Seminar which wrapped up yesterday in Winnipeg.

Manitoba Pork Council Chair Karl Kynoch notes a range of challenges have resulted in a drop in the number of hog producers in Manitoba from about 35 hundred to fewer than 800.

Karl Kynoch-Manitoba Pork Council

If you take a look at the meat price in the store, back about 25 years ago pork chops were 2.90 a pound and today if you look at that same good quality chop it's up around five dollars a pound.

But at the same time what the producer is receiving for a hog is reduced.

If we go back 25 years ago the producer got 160 dollars per pig and today they're only getting about 125 dollars per pig.

At the same time the meat product has went up in the store, what the producer receives has went down so we haven't kept up with that money coming back to the producers.

At the same time the input costs have went up dramatically also with the cost of feed and fuel, hydro, all that types of things have went up so the producer has really had to do a lot of adjusting to be able to survive.

A lot of producers are just going to have to look at absolutely reducing the cost as low as they can on feed inputs, freight, fuel, all these things here.

We start looking now for pennies per pig to just reduce that cost.

You're going to have to make sure your performance is as high as you can and you're really going to have to watch your commodity prices, when you buy your grain, when you sell your pigs and all of that.

This industry has really changed and you really have to understand the complete system of buying and selling to be able to survive.

Mr Kynoch says producers used to make 20 dollars per pig but they now have to survive on two dollars per pig so it takes more of them.

He is confident there will be pork production in Manitoba in 25 years but he concedes there will be more restructuring and the industry will look a lot different.

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