Recent pricing concessions negotiated with packers in Western Canada will make a difference, but not enough to stem the tide of losses that threatens to eliminate independent producers, says the Chair of Alberta Pork.  
Brent Moen took the time recently to describe for Prairie Hog Country the financial realities facing independent producers and the changes needed to restore profitability and confidence.  
“We’ve had some very good discussions with packers. All have made some tweaks to their pricing formals in the last couple of months to provide incentive to help minimize the loss they incur. But, at the end of the day, it wasn’t a big enough adjustment that it’s going to save the farms,” said Moen.  
“The happy news is that our producers have come through probably the worst market in the last 20 years and we’re still largely here. We’re still in business. As farmers are, they have the resiliency to buckle down in hard times and figure out a way to get through it. It’s a credit to their perseverance and determination to stay in the game,” said Moen.  
A short period of profitability in 2013 and 2014 helped producers catch up, but that money has been eaten up and, on average, producers continue working at a net loss that has worsened with the arrival of COVID-19.  
At this time, consumers are paying record prices for beef and pork, with retailers hauling in huge profits and packers making decent profits as well.  
Moen explained the conflict between short-term and long-term economics from the packers’ perspective. The processing plants belong to public companies that are expected to perform well for their shareholders. However, the prices they pay to producers cannot sustain the industry over the long term. There is neither ability nor incentive to expand while independent producers throughout Alberta are scaling back their operations to reduce the bleeding.  
Those producers who have diversified operations, including grains and oilseeds, can probably hold on for a while, said Moen. But producers who are solely invested in swine cannot continue to operate in this climate, he said.  
“So, in the long term, it’s a slippery slope for the packers. Short-term decisions will lead to long-term consequences.”  
Industry leaders attempting to negotiate a relief packages for producers have met closed doors at provincial and national levels of government, said Moen.  
“If you look at it on an annualized basis, and the five-year average cost of production for pigs is $185 and the average price is $135, we’ve got a 25 per cent drop in the gross value of our revenue, and we’ve also had an increase in cost of production because of COVID. Revenue is down and costs are up, so there’s a 35 to 45 per cent net decline. That’s got to constitute a disaster,” he said.  
But the governments are broke. COVID has cost a huge amount of money and the reality is, from a vote perspective, so they support farmers or generate votes?”  

Farmers make up less than two per cent of the voting population, which means governments are not inclined to invest a lot of money in the industry because it does not bring them a comparable level of support at the polls, said Moen.  
Any impact Canadian producers see from the discovery of African Swine Fever in Germany will be short lived and comes as a double-edged sword, he said.  
“Frankly, in the long term, nobody is going to benefit from this disease. We have to get control of it, get a vaccine – and that’s a long time off.  
“The key message for Canada and North America is absolute vigilance on biosecurity. We must ensure that we take every possible step. If we get it and lose our trade partners . . . it will absolutely kill our industry, and I’m not sure we will ever resurrect ourselves from that sort of a wreck,” he said.  
The weakest link in the chain, with the growing number of wild pigs running out of control in parts of the country, is that ASF will be discovered within those populations, said Moen.  
He believes Canada would be better off spending millions on a wild-boar eradication program rather than risk losing billions in economic losses if ASF were to turn up within those populations, as it did in Germany. A tight focus on border security is also vital, he said.  
There is a question, however, of who is responsible for setting up and financing an eradication program.  
“Countries don’t want to recognize the risk because, in a lot of ways, they don’t know how to manage it. A lot of countries are (ducking). If you’ve got your head stuck in the sand, there’s only one piece of your anatomy stuck up in the air, and that’s ultimately where you’re going to get it.”  
With no one willing to step into the breach, additional costs of keeping wild pigs at bay constitute one more nail in the coffin for producers who are already running in the red.  
Moen said consumers are not in the loop because they still have a good supply of reasonably priced food and they have no reason to worry about where it’s coming from. Until that confidence is shaken and retailers start to understand that there is a risk at the back end of the supply chain, there will be little incentive for them to ensure that profitability is shared downstream.  
“The ironic part to me is, Japan pays a premium for Canadian pork because of the quality factors, yet our own consumers don’t recognize how good a product we have locally. Part of it, to me, is we have never gone hungry. We’ve always had food that we could buy. We’re just so (darned) comfortable,” said Moen.  
“We live in difficult times as hog producers. The more people we get talking about it, the better chance we have for improvement.” •
— By Brenda Kossowan