Jason Manness, director of procurement for Western Canada at Maple Leaf Foods, told a meeting earlier this year in Starbuck, MB that Maple Leaf is looking to finance 33.3 per cent of new hog barn construction.
Manness outlined in a brief talk to the producers at the h@ms Marketing Services meeting how he thinks Maple Leaf while the third-largest hog producer in Canada, the ambition to get larger is not there. “There’s only hogs. It doesn’t mean we will or won’t, and I would never speak for the company, but I can tell you we much prefer farmers who own pigs.”
It is no secret that the Maple Leaf plant is needing hogs and lots of them.
“We see incredible demand coming from China. Many, many years, okay? It’s how we take advantage of that as an industry, which is spurring on this opportunity. So we want to sell more meat to China. Next, we want to start selling more fresh meat into China, and again we could talk for hours about that, which nobody’s doing. But I can tell you, we’re going to work to do that as a company, but we need more pigs,” he told the producers.
“So, producers, the details are coming out, okay, so don’t hold me to anything today, because they’re still coming out. We’re working, and as we communicate this, we’re still fine-tuning all the details. But at a high level, we’re prepared to give producers capital. We call it forgivable capital, over a 15-year term, if you don’t like that, don’t do it. But if we’re going to give capital in return, the only way we can pay back that capital is to get the pigs for 15 years, from that capital, from you. Of course, we want them longer than 15, but we need the commitment for 15.”
Here is what Jason Manness of Maple Leaf next told the producers.
“So we’re going to get capital for producers that want to build new barns. We can build new finishing or nursery barns, or they can build brand new sow farrow-to-finish barns. We have a program for both. If they build nursery or finishing barns, which is the preferred option because the capital we’ll give will be up to 33 per cent,” he said. “We’ve spent a lot of time looking at the building costs in Iowa and Southern Minnesota compared to the building costs in Manitoba and Saskatchewan, and anyway you cut it and slice it, we’re quite a bit higher. Maple Leaf’s prepared to eat that cost for you to help you compete on a North American basis.”
The director for procurement in Western Canada for Maple Leaf said the company keeps working out the details, and in talking to producers, several colonies are interested already.
“We are going to have traction. We are going to have success in this. This is going to be our biggest initiative this winter,” said Manness. “I don’t think the company will offer this next year; it is a one-winter thing. We want as much as possible to start building next year. Our goal is half a million pigs; we’ll hit that goal within five years. We absolutely will. We already have our list, and we’re already almost there. But my boss wants us to hit a million or more. That’s going to be a challenge. So we’ll see how we do, but I can tell you there’s a lot of exciting focus.”
During questions, he told producers,
“You must own the pigs; this is not for you building a barn, and having Maple Leaf come in there and own the pigs. We want you to own pigs and to make money from the pigs, to manage the risk of the pigs if you work with us. Remember, this arrangement is not a contract finishing arrangement whatsoever. I’m glad I said that because a lot of you might be thinking that; that’s not what it’s about.” •
— By Harry Siemens