There are things that simply don’t make sense but when one segment of a larger system misuses and abuses the rules, often for the greater good, the powers that be penalize the whole system.
Case in point with the vacant meat processing jobs, climbing hog numbers cutting into profits and maybe putting some hog producers in the red once again later this fall.
First the jobs thing. Ron Davidson of the Canadian Meat Council says every job that remains unfilled in Canada’s meat processing sector costs another four jobs within the Canadian economy.
That is similar to when hail destroys some farmer’s crops, and the entire food chain suffers all the way down the line, humanely and economically.
The federal government keeps focusing on new trade agreements that creates new export opportunities for Canada’s meat processors but a shortage of workers limits the ability to take advantage of those opportunities. The feds recently completed a deal with South Korea, pending agreements with the European Union and Ukraine, negotiations involving the Trans-Pacific Partnership, and pending free trade discussions with the Philippines.
Davidson, says labour is one of the industry’s primary challenges.
“People just don’t realize how much is at stake,” he said. “The meat processing industry is the single largest component of the food processing sector in Canada.”
While providing a market outlet for the livestock producers, it also provides a market for grain growers who sell feed grains to the livestock industry.
“We have 65,000 workers, according to Statistics Canada, in the meat packing and processing industry and, for every job that’s on a production line in a meat plant, a study by the University of Saskatchewan suggests at least another four jobs in the economy,” Davidson said. “These other jobs could be on the farm, they could be in the service sector, they could be in transportation, they could be in marketing so even when we have 1,000 jobs available in the meat industry that are unfilled on the line in the plant it means there’s at least 4,000 jobs elsewhere in the economy that aren’t going filled.”
Davidson says processors are recruiting as actively as possible among all of the Canadian groups, including unemployed people, new immigrants and refugees and continues to work with government to try to gain access to foreign butchers and meat cutters when it’s been clearly demonstrated that there aren’t enough available in Canada.
When it comes to pork demand, hog numbers, and how those affect hog farmers and their profits, Tyler Fulton, the director of risk management with h@ms Marketing Services, says hog numbers are trending higher than anticipated and, even as recently as the June Hogs and Pigs Report, the USDA didn’t suggest the hog industry would be looking at hog supplies quite this high and is pressuring the market.
“Producers in Canada are generally profitable,” said Fulton. “There is possibly a bit of a squeeze that could come later this fall as prices drop as they typically do at that time of year but also partially due to higher feed costs that we expect, largely because of the drought throughout parts of Saskatchewan and to a larger extent, Alberta.”
He says those two factors will tighten things up and could send profit margins for producers into the red for some period of time and probably for most producers, but hopefully will last for only a short time.
“Next year is already shaping up to be, I think generally, a profitable year,” he adds.  •
— By Harry Siemens