After returning from a spring meeting in Swift Current, SK, with members of the h@ms Marketing Services Co-op, general manager Bill Alford reported a positive outlook for 2024 from the perspective of their producers. There is notable relief regarding the input costs of raising market hogs, and prices are favourable.
“As a result, this year’s profit margins look promising, leading to a general sense of optimism within the cooperative.”
h@ms represents Western Canadian hog producers, offering a superior suite of hog marketing services designed to maximize producer margins
Alford discussed the potential impact of the so-called voluntary country of origin labelling for meat entering the United States on the hog market in Manitoba and Western Canada. He noted that a significant portion of the market hogs from Manitoba, particularly weanling production, are sent to the U.S.
“There is concern about how these labelling changes might affect this trade,” he said.
Although the WTO ruling some years ago repealed the country of origin labelling (COOL), its effects linger, with the U.S. adding further clarification on labelling rules. This has raised concerns, particularly for beef producers, but it affects all meat categories, including pork.
Alford mentioned that in Manitoba, they don’t export a significant number of hogs to the U.S. for finishing, partly due to the acquisition of the Neepawa packing plant, which mitigated trade risks. However, he expressed concern about the broader industry impact, particularly given the integrated nature of the hog market across borders. While he doesn’t anticipate immediate pricing impacts in Manitoba, he is vigilant about potential market access and pricing issues for hogs exported from other parts of Canada, such as Ontario, to the U.S.
Alford expressed concerns about the potential for packers to segregate Canadian-origin hogs in the U.S. market, which could lead to a decrease in the Canadian price for these hogs and affect the overall market price. This issue stems from the lingering effects of the initial implementation of COOL (Country of Origin Labelling), where significant companies opted to purchase only Canadian-origin hogs after the repeal of the regulation to avoid the complexities and liabilities associated with potential legal challenges. This situation reflects a broader trend of protectionism, where U.S. producers may favour domestic products to support local prices, thereby restricting the inflow of foreign supplies, such as Canadian hogs.
Alford shared insights into a WhatsApp group discussion among hog producers, highlighting the group’s competitive nature and varying opinions on marketing strategies.
Some producers believe they can manage effectively without external marketing services, reflecting confidence in their methods. He mentioned that while some choose not to use his cooperative’s services, he remains open to welcoming more members.
He also recounted a positive shift in the group’s dynamics, where discussions have become more constructive and less confrontational than in the past.
Alford discussed the dual role of many in their cooperative as hog and grain producers, noting the mixed emotions that can arise from fluctuating market conditions. He points out that while grain prices have dropped, the profitability of hog production has provided a balance, which is a crucial reason why many engage in mixed farming. Alford also mentions the stability of their producer base despite the challenges of the market dynamics where supply increases lead to price decreases.
He highlights the need for investment decisions, particularly regarding regulations and market conditions that might change by 2029. Despite the perception that the number of hog producers is not growing significantly, Alford reports an increase in hog production, rising from around 1.6 or 1.7 million to potentially two million hogs marketed this year. This indicates a positive trend in the industry, especially in regions like Alberta. •
— By Harry Siemens