Delegates to Alberta Pork’s 2018 Annual General Meeting have unanimously approved a resolution seeking extra cash from processors once Canada’s new hog quality platform kicks in.

The three elements of Canadian Pork Excellence – PigSAFE, PigCARE and PigTRACE – replaced the Canadian Quality Assurance (CQA) program in January, requiring a few tweaks and offering in the way producers manage, track and report their stock while offering more detailed information about how to carry out those tasks.

At the meeting in Calgary, producer Andy Vanessen introduced a resolution asking processors for an additional $7 per hog, seconded by fellow producer Ard Bonthuis.

Vanessen said there was nothing significant in the amount itself, just the message that producers are being asked to do more and more without seeing any benefits in their pay stubs.

“The time has come to draw a line in the sand. I’m tired of doing more for nothing,” said Vanessen. Bonthuis remarked that he is “sick and tired” of being asked to do more without seeing a benefit up front.

“Pay me more or don’t do it,” he said.

John Ross, executive director of the Canadian Pork Council, welcomed their input while defending the program itself.

Outside of the meeting, Ross said the CPC was to meet with processors within the early weeks in December and open negotiations regarding some compensation to producers. He will report his progress in January but does not expect much will have changed by the time Banff Pork Seminar convenes on the 8th.

“This is a question that has come up across Canada, and I think rightfully so. Producers are investing a lot of time and effort on their farms to produce a high-quality hog that, in turn, produces great pork. They’re looking for some recognition – tangible recognition – from packers for that effort.”

CPE should end up being less onerous than CQA, outside a little extra work to set up, said Ross.

“The basic model, in fact, is all the same. There is obviously a large change in the animal care program, simply because the old model was built on the 2003 Code of Practice and, in 2014, we got a brand new Code of Practice.

“On the food safety side, it’s essentially the same program. We’ve made it a little bit similar at the farm level. There is a lot more background information so that producers and their validators understand what we’re trying to (achieve), which should make it simpler. Secondly, in the years gone by under CQA, producers were told we should have a standard operating procedure and producers were on their own to fill in the blanks.”

The binder available on CPC’s website gives producers all the information they need to meet requirements, said Ross.

CPC has not yet tested the waters to see how packers will react to producers seeking a premium for CPE-approved hogs.

“We have just barely started, on rolling this program out, and we have barely discussed with the packing community about how we might share the costs and share the benefits,” he said.

CQA was a producer led program, developed from the necessity some leaders had seen for a national assurance program they wanted to develop on their own rather than have someone else force it on them.

The level of assurance to buyers has added value in three “buckets,” said Ross. It’s a perfect agenda for a review of the operation, it provides a credible platform for building public trust and it adds value to the products that carry the Canadian Verified Pork brand, he said.

“When we go to market with it, people tell us it carries value. However, the way we price hogs in Canada . . . doesn’t really allow us to see tangibly or to capture that value.”

That’s the reason for the discussion now of a made-in-Canada pricing system, said Ross.

“Can we make a coherent argument that says there’s value associated with this and the way we are running things now is not sustainable – we need some help?”

Ross said there are two ways to open this discussion: As partners working together, the way AP Executive Director Darcy Fitzgerald discussed in his presentation, or doing it the old way by asking packers to shell out cash to compensate producers for the added value.

“It’s going to be a process. Part of this deal around partnership is that partners need to come together on things,” said Ross.

“We do need to be able to articulate to the packers, in a coherent manner, (that) this is the value, the way we see it,” he said.

The question comes up about consumers at the meat case with $10 and whether those quality issues come to mind, said Ross. It’s not inherently obvious at that point whether consumers will pay for that assurance, he said.

“I will tell you, however, that when Canadian Verified Pork came out in Japan, Costco picked it up right away. So, we actually own the Costco business in Japan.”

Costco customers in Japan have shown a preference for the brand and pursue it aggressively, he said.

The fact that Costco still carries pork from the United States in its Western Canada outlets is a function of supply, said Ross. Canadian Verified Pork is now sold at Costco outlets on the eastern side of the country, he said.

Outside the discussion around the value of CPE, delegates to the AGM heard various arguments concerning the current pricing system and whether or how it needs to be changed.

Chair Dan Majeau said in an interview with Prairie Hog Country that a made-in-Canada approach in which producers and processors share the costs and the benefits has a measure of appeal. Although that level of partnership is a long way off, some movement can be seen in Olymel’s courtship of western producers who will feed hogs under contract to supply its Red Deer plant.

However, Alberta Pork director Martin Waldner said during the meeting that Hutterite Colonies are watching closely as one colony in the southern area of Alberta gears its operation to ship live pigs to Montana for finishing and processing. If that colony gets the right results, a number of others will follow suit, said Waldner.

Economists and market analysts called to speak at the meeting stressed that producers cannot get full value for the pigs while the packers are unable to run their plants at or near full capacity.

Market analyst Kevin Grier said he is “not impressed with the whole idea” of a made-in-Canada price. “What are you trying to achieve? I fully understand the issues and complaints about using the U.S. price. The negotiated market is so thin now. It is a global market. To say that we’re going to disconnect from the U.S. is impossible – it’s not realistic.”

Grier said hog pricing in the United States is tightly linked to the U.S. cut out. The Canadian cut out is based on the U.S. cut out, so where is the gain? he asked.

“Frankly, tie your reference price to whatever you want, because it really boils down to the factors and those premiums,” he said.

“Fair price is a meaningless term. We have to talk about supply and demand.” In summary, he said he is skeptical about a made-in-Canada price, where it would go and whether it would be unique in a global system.

The meeting closed on a high note, with CPC Chair Rick Bergman presenting former Alberta Pork Chair Frank Novak with a plaque recognizing his years of service.

Majeau has replaced Novak at the helm but will be able to stay for only one year based on an Alberta Pork bylaw limiting directors to six consecutive years in office. •

— By Brenda Kossowan