Manitoba Pork holds AGM No. 55 via Zoom – Made-in-Canada hog price

By Harry Siemens 

Manitoba Pork held its 2020 AGM by zoom webinar on July 29, with several board members physically distancing in the Manitoba Pork boardroom in Winnipeg, MB, and other board members calling in via zoom joined by some Manitoba pork producers and interested observers. 

Manitoba Pork employee Grant Melnychuk acted as returning officer in the election of four director positions. Members elected George Matheson for the West District and Rick Bergmann for the East District by acclamation. Next, they appointed Margaret Rempel director-at-large and James Hofer as director for the Hutter Schwein. All are two-year terms, from 2020 to 2022.

The board executive also re-elected, George Matheson, chair, Rick Bergmann, vice-chair, and executive members Rick Préjet and Scott Peters.

Manitoba Pork general manager, Andrew Dickson, said for legal reasons, the council held an annual meeting, elected officers, and conducted other business. 

Dickson referenced two other issues. First, they hope to get into a dialogue with the processing plants about getting some additional funds, payments, and formula in place at the processing plants to recognize participation in quality control programs. That led to a broader discussion of all the processing plants in Western Canada, and other pork councils, in Saskatchewan, Alberta, and British Columbia about pricing formulas going forward over the next five years. 

“The current pricing mechanisms have created all kinds of problems,” he said. “They’re so U.S. orientated with pricing mechanisms designed to deal with the U.S. marketing issues so different from ours.”

Dickson said the U.S. consumes over 70 per cent of all pork domestically and exports  25 per cent. Canada does just the opposite, exporting 60 per cent and consuming a much smaller portion. With the U.S. pork price set, based on whether the buyer wants the product or not, the current U.S. pricing model with a surplus of pigs, is telling producers to cut back on production and don’t need all these pigs, no market for them. 

In Western Canada, to an extent in eastern Canada, the industry has the opposite problem. 

“We have good markets for our pork products, and we move more pigs to our plants and make them more efficient,” said Dickson. “We need to develop a pricing mechanism that reflects getting more pigs into our plants to make them cost-efficient to stay with competitors.”

Canadian producers saw some of that happen during the first three or four months of COVID-19. Prices differed across the country from province to province depending on processing plant COVID-19 news.

In early August, the U.S. pricing mechanism told producers in the U.S.; there is not a home for all the pigs. So they’re doing their darnedest to try and process them. They’re trying to encourage producers to cut back production a little bit so that there’s a better match between production capacity on the farm, processing capacity, and the market reality for trying to sell pork.

“In the U.S., a significant part of its domestic market is the foodservice industry, like the restaurant trade, hospitals, bars, outside of the home, etc.,” said Dickson. “Much of the trade vanished with the COVID-19 fallout creating a backlog in the system of an unneeded product. As the American economy revives and as consumers start eating out, hopefully, that domestic market will increase.”

The pig industry in North America is a very finely tuned system. There’s a very close match between production capacity on the farm and consumption because the product doesn’t store well.

“It’s not like the grain industry where they can store a year or two supply of grain. We can’t do that with pork, and we have maybe 20 days of cold storage capacity.”