ALBERTA FARM EXPRESS
12/10/2007
High feed grain prices are causing some concern for western Canadian hog producers, who are losing money and sending more animals to the U.S. to be fed as a result.
"Feed grain costs are the highest they've ever been," said Neil Ketilson, general manager of Sask Pork. He estimated that the cost of feeding a hog in Saskatchewan was roughly $40 above what producers were actually seeing for their finished animals.
Ketilson said those hog producers that also grow grain were taking a loss on their grain and feeding it to their animals in order to subsidize their operations.
Other larger producers are sending more and more animals to the U.S., he said, estimating that upward of 50 per cent of the province's weanlings could eventually move to the U.S.
Ketilson said the feed situation was unlikely to change until another crop was in the ground next spring. In the meantime, he said, many producers were worried about how they will survive.
"We're bunkering down for a really difficult winter," he said.
Karl Kynoch, chair of the Manitoba Pork Council, said producers were operating in the red a lot sooner in the year than normal, as high feed costs, together with the strong Canadian dollar, were creating challenges for the hog sector.
"It will be really tough for a lot of producers to hang on right now," said Kynoch, adding that many Manitoba producers were shutting down their finishing barns and instead shipping more weanlings down to the U.S.
"It's cheaper to haul little pigs down to where the main source of feed grain is than to bring the grain up," he commented.
Kynoch thought the issue wasn't so much the high cost of feed, but rather the low returns for slaughter hogs.
Ketilson agreed that the returns to Canadian hog producers need to increase. However, he pointed out, U.S. producers are still breaking even and the overall market is unlikely to see a shift until U.S. hog producers start losing money as well.
