Hams Marketing recently organized producer membership meetings in Prairie locations, including Starbuck, MB., Swift Current, SK., and Lethbridge, AB., to foster closer collaboration and understanding within the Western Canadian hog industry. The objective of these gatherings was twofold: to actively seek feedback from hog producers and to provide comprehensive reports back to the same producers, thereby promoting transparency and constructive dialogue within the industry.
One of the primary goals of these meetings was to gain valuable feedback directly from the producers who form the backbone of the Western Canadian hog industry. Hams Marketing recognized the importance of understanding the on-the-ground realities faced by producers, considering factors such as harvest yields, input costs, and market dynamics.
In a recent conversation, Bill Alford, the General Manager of Hams Marketing in Winnipeg, MB., shed light on the prevailing state of the hog industry in Western Canada. Hams Marketing represents Western Canadian hog producers, offering a comprehensive suite of hog marketing services meticulously designed to maximize producer margins.
Alford gave a glimpse into the current sentiments of hog producers in the region, delving into the challenges they face and the role of key industry players.
To set the stage, Bill offered a broad overview of the prevailing attitude among hog producers in Western Canada. Many producers engage in farrow-to-finish hog operations, often complemented by substantial grain farms. Fortunately, the recent grain harvest has been largely favourable, with some exceptions in areas affected by drought. This good harvest scenario has translated into lower input costs for feed grains, providing considerable relief to producers. “The current reduction in production costs amounts to approximately $20 to $25 per hog compared to the preceding year.”
Moreover, the collaborative spirit among hog producers became evident in discussions observed in WhatsApp groups. Producers, benefiting from good harvests, have begun to share and move grain among themselves. This collaborative effort fosters community and contributes to significant cost savings, mainly when producers can utilize their harvested grain without requiring additional purchases.
Despite the favourable conditions in terms of input costs and harvest yields, hog producers are actively seeking optimism in future hog prices.
Alford emphasized that the majority of producers are currently experiencing a cautious approach when it comes to booking hogs in advance. This cautiousness reflects the futures market for Lean Hogs discounted relative to cash pricing, reflecting the prevailing uncertainty.
He expressed belief in a potential slowdown in the slaughter of pigs in early February, derived from tracking slaughter trends in the US.
“This anticipated slowdown will provide crucial support for hog prices, offering a glimmer of hope for producers in the new year,” said Alford.
However, Alford acknowledged that the industry needs to navigate through the fall, with prices possibly experiencing a temporary dip before stabilizing.
The conversation shifted to processors in the hog industry, focusing on major players such as Maple Leaf at Brandon, MB.
Alford underscored that the value of pork, particularly on the fresh pork side, needs to catch up with the production costs. Processors, who also own a significant portion of the pigs going through the plant, are grappling with losses due to these cost challenges.
“The prevailing trend is where both processors and producers find profitability elusive.”
Turning the spotlight onto Hams Marketing, the general manager shared insights into the organization’s trajectory. Despite the overarching challenges faced by the industry, Hams Marketing continues to grow, offering services that producers find valuable. The organization’s focus on risk management services and detailed reporting emerged as a critical driver of its success.
“Hams Marketing is actively marketing more hogs than the previous year and has expanded its business further west, signifying growth opportunities within the industry.”
In conclusion, Bill Alford’s insights provided a nuanced perspective on the current dynamics of the hog industry in Western Canada. The challenges producers and processors face show the industry players’ resilience. Organizations like Hams Marketing play a pivotal role in supporting hog producers through innovative services, underlining the adaptability and determination of the Western Canadian hog industry in navigating complex landscapes. •
— By Harry Siemens