After seven lean years as a hog producer and making some changes going forward it is good to see some big profits returning to the pig business, says past chair of the Canadian Pork Council and an Alberta mixed farmer.
Jurgen Preugschas, farming since 1970, says following seven lean years in the pig business, he says let’s hope there are seven good years.
“That would be a genuine pleasure, but I’m also a realist,” he said in a conversation at the recent Banff Pork Seminar. “It is certainly better because we’ve recovered some of our losses in these past years, certainly unprecedented profits, needed to get that up feeling once again into our industry.”
Preugschas says with 2014 behind them, it feels great but he knows, as does the industry, they still have to manage really, really well to be competitive in the world.
Not everyone came through those seven lean years, but Preugschas and his son did, but not without significant changes to their operation.
“Unfortunately, a lot of families went out of the business. Some lost their operations, some lost their homes, and that to me is the most difficult part,” he stresses. “We were fortunate in being able to sweat through it, changing our operation to where we now custom finish for OlySky now and that is working very very well.”
Preugschas outlines what brought them to that decision, knowing that things down the road could turn around, and any higher profits would not necessarily accrue to them, if they fed pigs for someone else.
“Well, the banks were a big help in that decision. You can only borrow money for so long. And even if the equity is there, enough is enough,” he says. “So we had to take a real strong hard look at things. In our total operation, we had to sell some land to meet our commitments, and acquire a contract with OlySky to custom finish pigs. My son is a partner with us and he is very happy with this setup in terms of having, regardless of where the prices are, and a monthly income that we can live off of.”
The Preugschas family operates several farms. One where they custom finish pigs, Pigs Are Us Inc., a 9,000 hog finisher unit, but strictly a finishing unit. Their home farm, always the breeding unit, as part of Peak Swine Genetics, but they don’t have sows anymore at home because of the biosecurity issues now, even though it is three miles apart with traffic flowing back and forth.
Looking forward as he stood there on January 20, 2015 at the 44th annual conference of the Banff Pork Seminar, he feels optimistic.
“We always have to take a look at where do we fit in as an exporting nation with the world,” Preugschas said. “Certainly, the much weaker Canadian dollar is a very positive thing for us today, down at under 82 cents whereas a year ago we were at par. So that helps us in Canada to compete with the world and get us back in line, our packers and everyone back in line with our relatively high wages that we have to pay, and other higher costs like energy, with some of our regulatory costs much higher than many other countries.”
The weaker dollar allows Canadian producers to be more competitive. Everything staying the same, the outlook is relatively positive.
“I think with what we’ve gone through here in Canada especially, it is harder on us, than say the American producers, so our expansion is going to happen with a little more thought and a little slower than it will possibly in the U.S.,” said Preugschas. “We will need more than one year of profitability before we see a major expansion taking place.”  •
— By Harry Siemens