Preamble: Until recently the Manitoba hog industry was contributing approximately $1 billion to the Manitoba economy and employing up to 14000 people, exporting to the USA the highest number of live pigs in Canada (about 1.5 million market hogs and 4 million weanlings annually).

The hog industry has fallen on hard times in recent months due to rising feed and other input costs and falling market prices.

The implementation of mandatory Country of Origin Labeling (COOL) legislation in the USA has had a drastic negative impact on Manitoba’s export of live pigs.

The governments of all of the other major pig-producing provinces in Canada (Alberta, Saskatchewan, Ontario and Quebec) have introduced major cash payment programs to shore up their hog industries, yet Manitoba, the largest pig producer in Canada, has not.

Resolution: That the Government of Manitoba immediately introduce a temporary cash payment program to assist Manitoba hog producers to counter the impacts of COOL and see them through this unprecedented financial crisis.

 

Resolution Report:  

The Manitoba Chambers of Commerce produces Resolution reports as part of its commitment to be accountable to its members. The reports are updated as matters unfold and have three components:

MCC Advocacy: Specific activities the MCC has done to help make this Resolution a reality. 

Developments:  Events (e.g. government action, media coverage) that relate to Resolution. 

Current Status: The MCC’s current plans to help make this Resolution a reality. 

Advice, comments, and information sharing are welcome; simply enter a reply at the bottom of this post.

 

MCC Advocacy: 

April 16, May 6 and May 7, 2009: The 2009-2010 Resolutions were posted on the MCC website, listed as part of a comprehensive Report on AGM 2009 and then notice of this story was circulated through the MCC e-Omnibus which is sent to all MCC members, Media and Government.

May 19, 2009: Resolution books were sent to every MLA and every Member of Parliament that hails from Manitoba. The following had this Resolution specifically drawn to their attention with a detailed letter setting out the background to this issue, Government initiatives (where applicable), and an argument for the Resolution:

• The Premier
• The Minister of Finance
• The Minister of Agriculture, Food and Rural Initiatives 

May 5, 2009: The Minister of Conservation was asked about this issue during his edition of the MCC Speakers Series. A video of that answer was posted on the MCC website in a story entitled “Minister of Conservation Addresses MCC.”  

The story also reproduced this Resolution and was circulated through the MCC e-Omnibus which is sent to all MCC members, Media and Government. 

The video is reproduced here:

 May 11, 2009: The MCC attended a rally at the Manitoba Legislature in support of the hog industry.

The MCC has posted three videos from the event:

• comments from The Honourable Rosann Wowchuk, Minister of Agriculture, Food and Rural Initiatives;
• comments from Karl Kynoch, Chairman of the Manitoba Pork Council, explaining the needs of the industry; and
• comments from MCC President Graham Starmer explaining the MCC’s support for the industry.   

All three videos are here, you can also access Mr Kynoch’s speech below:

May 15, 2009: Did an interview with Radio Station 1250 in relation to this issue.  

May 21, 2009: Did an interview with CBC Radio Station in relation to this issue.  

May 25, 2009: Did an interview with the Manitoba Cooperator in relation to this issue.  

June 10, 2009: Met with a representative of Maple Leaf Foods on this matter.

July 24, 2009: Met with the Manitoba Pork Council in relation to this matter. The Council is disappointed with the Government of Manitoba’s response and has been working with the Canadian Pork Council to develop a plan entitled ”Strategic Transition Plan: The Canadian Hog Industry’s Plan for Success”.

The plan is calling on the appropriate levels of government to:

• Approve a special H1N1 Recovery Plan Loan;
• Agree to adjustments to the Advance Payments Program emergency advances; and
• Establish a Hog Farm Transition Payment Program.

The document can be accessed in its entirety here.

July 22, 2009: This Resolution was highlighted in an MCC E-Update which was sent to 2,500 individuals including MCC members, Media and Government. 

 

August 19, 2009: This Resolution was highlighted in an MCC E-Update which was sent to 2,500 individuals including MCC members, Media and Government. 

 

August 26, 2009: This Resolution was highlighted in an MCC E-Update which was sent to 3,000 individuals including MCC members, Media and Government. 

 

Developments:

May 6, 2009: The website of the Winnipeg Free Press contained the following story entitled “Pork producers seek government aid”:

MANITOBA’S pork producers want the province to provide them with between $50 million and $100 million in aid money this year.

Andrew Dickson, general manager of the Manitoba Pork Council, said trade embargoes imposed by countries because of fears from the H1N1 flu virus have exasperated the poor market conditions pork producers have been facing with the high dollar and high feed grain prices.

Dickson said the financial assistance can’t come in the form of low-interest loans or advances on payments, adding the current situation means producers can’t afford that kind of help.

Dickson said he met with Agriculture Minister Roseann Wowchuk two weeks ago but he has not received any commitment from the Doer government for financial aid.

It costs hog producers $145 to raise a pig to market but they’re only earning $116 when it’s sold, Dickson said.

“We’re not rich,” Dickson said. “A little bit of help would be appreciated right now.”

June 23, 2009: The Manitoba Progressive Conservative Caucus isssued a news release entitled “Thousands Of Jobs At Immediate Risk, Action Needed Today.” The news release stated as follows:

Manitoba’s pork farmers are desperately calling on the provincial government to provide short-term financial assistance in order to help them to weather a series of severe economic challenges.

At an emergency strategy meeting held last night in Morris, Progressive Conservative Leader Hugh McFadyen and Agriculture Critic Ralph Eichler joined more than 500 pork farmers and other stakeholders along with their caucus colleagues, Larry Maguire, Stu Briese, Cliff Graydon, Mavis Taillieu, Kelvin Goertzen, Blaine Pedersen and Peter George Dyck to discuss short-term emergency financial measures to keep the industry afloat through the crisis.

McFadyen said as farm families are grappling with the negative financial impact of issues such as Country of Origin Labelling, low prices, high input costs, the NDP’s hog moratorium, and the impact of H1N1, among others, it’s critical the NDP government acknowledge the crisis and take immediate action today.

“It’s disappointing that the Premier, the Agriculture Minister Rosann Wowchuk or even a single NDP MLA showed up at this emergency meeting to discuss steps to help the industry,” McFadyen said.  “This crisis doesn’t just affect rural Manitoba. Everyone – including the people of Winnipeg – will feel the ripple effects of this crisis whether it is through job losses or higher prices.”

McFadyen called for: 

1. An immediate sitting of Manitoba’s Standing Committee on Agriculture and Food to hear from pork farmers and policy experts on the crisis;

2. Short-term emergency financial measures to keep farm families afloat through the crisis, similar to those taken by the Saskatchewan government, which delivered short-term, time-limited and immediate financial support to pork farmers so they can survive until the expected recovery or, should they chose, exit the industry without catastrophic personal financial hardship.

“Agriculture is essential to the fabric of Manitoba,” McFadyen said. “Pork farming is the economic lifeblood of agriculture and hundreds of communities, large and small, depend on it for survival. If action isn’t taken immediately, our province will be permanently and immeasurably weakened.”

June 24, 2009: In a Winnipeg Free Press article entitled “Hog producers to get cash help: But advances may come too late for some” Larry Kusch reported that Manitoba hog producers will qualify for federal-provincial cash advances totalling $37.7 million in the coming weeks. The article also expressed some concern that the payments may not arrive in time. Click here to access the full article.    

June 25, 2009: Manitoba’s hog producers will now have access to a Targeted Advance Payment (TAP) under the AgriStability program, Federal Agriculture and Agri-Food Minister Gerry Ritz and Manitoba Agriculture, Food and Rural Initiatives Minister Rosann Wowchuk announced today. For details, click here.

July 7, 2009:  The Winnipeg Free Press published an Op-Ed by Kelly Funke entitled “Hard times for hog farmers”. Here is the Op-Ed in its entirety:   

The province has answered Manitoba hog industry pleas for financial aid with a federal-provincial Targeted Advance Payment totaling $37.3 million. That may sound like a huge bailout for so-called factory farms to those with extreme views, but to those whose livelihoods depend on hog farming, it sounds like a drop in the ocean. They want Manitobans to understand that they need direct financial aid that will see them get back on their feet and allow them to resume contributing to the local and provincial economies.

The pork industry contributes upwards of $1 billion to the provincial economy. More than 13,000 Manitobans are employed directly or indirectly by the pork industry. A large number of the new immigrants to Manitoba touted by the government just last week came to work in the pork industry, many of them on the province’s 800 or so hog farms. (In fact, “industrial butchers” and “farm supervisor and spec. livestock workers” are two of the top 10 job categories filled by these new immigrants.) Manitoba’s hog industry includes farms of many shapes and sizes, from large-scale indoor operations to mid-size outdoor/indoor operations, to small outdoor operations coupled with grain production. There are large companies, Hutterite colonies, families and individuals operating hog farms.

Another truth about the industry was evident at a rally of hog farmers on June 22 when about 600 people filled a hall in Morris to capacity. There were couples, families with children anywhere from infancy to early 20s. They watched and listened, solemn-faced, to their industry spokesmen, federal and provincial politicians and other farm leaders. Finally, they heard an experienced farm-debt mediator explain that they have many options and they should accept that it may indeed be time to leave the industry.

Staff at the Manitoba Pork Council regularly take phone calls from people who are in such desperate financial straits that some have been driven to ask, “What’s left for me but to shoot myself?” It’s not an exaggeration. That’s just the way it is these days.

And to be fair, it’s not everyone’s story. Some farms are succeeding. Some farmers continue to struggle and explore their options.

Consider this typical independent Manitoba hog farm with a handful of employees. Among them are people who have been with the farm for a couple of decades, a disabled worker who may have trouble working at another job that requires long hours and intense concentration, and a few who speak little English. At least one worker has a large family to support, another has an ill family member, and several are recent immigrants. Only one of them may have luck in finding another job, the farmer fears. Each of these people currently receives full health benefits along with their regular pay.

In mere months this family may have to stop farming and let their workers go.

That means they will also stop supporting the local feed company, the trucking company, the local bank, the local vehicle dealership, the local sporting goods store, local restaurants and other local businesses. The employees may have to depend on employment insurance and will most likely also stop being able to support local businesses at the same level.

All these folks ask is help to refinance in order to continue the way of life they love, to continue employing people in the community, caring for their animals, and producing the best pork in the world. The entire pork production system is aware of the cyclical nature of the industry. But this set of compounding circumstances — low hog prices, high feed grain prices, the high Canadian dollar, Country of Origin Labelling and finally H1N1 flu — is more than most could have predicted.

The true consequences of inaction will be far-reaching and will take their largest toll on the humans behind the industry.

Kelly Funke has been an employee of Manitoba Pork Council since September 2008.

August 7, 2009: The Manitoba Chambers of Commerce received a letter from Manitoba’s Minister of Finance. Unfortunately, that correspondence did not address this Resolution.

The letter does however feature detailed comments from the Minister of Finance on the Payroll Tax; Business Tax Relief; Infrastructure; Human Capital; and Effective, Efficient, Accountable and Transparent Government.

It can be read in its entirety here. 

August 11, 2009 (updated August 12):  The Globe and Mail included the following article by Patrick White entitled “Cold barbecue season puts the heat on pork sector”:   

From hog barn to barbecue grill, this has been a summer without sizzle.

As cool weather persists throughout the Prairies, Ontario and the Maritimes, barbecue grills gather dust. Briquette bags remain sealed. Grocery store displays of Montreal steak spice go untouched.

And Anna Tomeczkowicz can’t move any pork chops.

“Nobody is barbecuing in this weather,” she said from her family’s Toronto butcher shop, Spring Creek Farm Produce. “We are selling much less of all the grill meats.”

As if Canada’s hog farmers needed any more bad news.

Fewer chops on the grill translates into lower prices for pigs (HE-FT43.98-0.38-0.85%), compounding an anxious year of catastrophic losses for pig producers that has persuaded many to sell the farm.

“Based on present market, we may have to close the doors by mid-September or October,” said Manitoba farmer Bill Vaags. “We’d have to sell all the stock. Some of the pregnant sows might have to be aborted. It’s a sad story.”

Particularly sad given Mr. Vaags’s standing among the nation’s pork producers. Former president of the Canadian Pork Council and member of the Manitoba Agricultural Hall of Fame, he’s been raising hogs in the province since 1961.

But in that time, he’s never seen it so bad.

Barbecue season normally brings a seasonal spike somewhere around $1.50 a kilogram. Thanks to high feed prices, Mr. Vaags needs at least $1.30 to break even, but as of last week he was looking at $1.07, a price that’s plummeted more than 20 per cent in recent weeks.

The blow wouldn’t be so bad if he had some cash on hand. The past two years have been so lean that the 73-year-old says he’s burned through most of his retirement fund.

“We weren’t exactly sitting pretty for retirement before,” he said. “But now so much money is gone, we’re looking at surviving totally off of meagre pensions.”

Various forces are conspiring against Canada’s hog farmers. New U.S. laws surrounding country of origin labelling have changed American meat-buying habits, and the rising loonie – now sitting over 92 cents compared with the U.S. dollar – has made all Canadian exports less competitive.

To make matters worse, some say the industry took too long to persuade consumers they wouldn’t catch the H1N1 flu from eating pork.

The result is an industry on the wane. More than 3,300 hog producers have left hog farming since 2006. Many of those who remain are having difficulty bearing the strain.

“We’re hearing from farmers who are not eating, not sleeping, not talking to spouses, having arguments with children and neighbours,” said Janet Smith, program manager of the Manitoba Farm and Rural Stress Line. “We’ve seen more calls from hog producers than we ever have.”

The Canadian Pork Council has requested an $800-million loan from Ottawa on behalf of farmers, but Agriculture Canada has yet to make it clear what kind of special assistance it may offer the industry.

Until federal help arrives, some producers will scrounge for feed.

“We are really struggling to feed the pigs,” said Jurgen Preugschas, president of the Canadian Pork Council. “As farmers, we maybe cry wolf a little too often, but this is way beyond that. When your top producers are losing extreme amounts of money and producers are having nervous breakdowns, it’s serious.”

August 15, 2009: The Federal Government issued a news release entitled “Government Of Canada Delivers Support For Hog Industry Restructuring.” That release can be read here.      

August 15, 2009: The Manitoba PCs issued a news release entitled “PCs Congratulate Federal Conservatives On Commitment To Farm Families: NDP Ag Minister only one denying the severity of the pork industry’s problems: Eichler.”

That relase stated as follows:

Progressive Conservative Agriculture Critic Ralph Eichler is today renewing his calls for the NDP government to stop ignoring Manitoba farm families by providing immediate support to the struggling pork industry. His calls come in response to today’s announcement by the federal government to provide a new and comprehensive restructuring plan to support the industry.  

“The NDP has no plan to help the agriculture industry in Manitoba,” Eichler said. “While the federal government recognizes farm families are in crisis, the NDP Agriculture Minister continues to bury her head in the sand and deny any problem exists.” 

Last week, Eichler called on the NDP government to release an immediate support plan, noting Minister Rosann Wowchuk has rejected requests to convene the Legislature’s standing committee on Agriculture and Food. Following that, Wowchuk appeared on the radio to again dismiss the trouble in the industry. 

“The federal government sees the problem. The opposition sees the problem. The only ones who don’t see a problem are the NDP government.” Eichler added, noting the provincial government did not have a presence at today’s federal announcement. “It’s time for the minister to wake up and get a handle on her portfolio before it’s too late for farm families.” 

August 22, 2009: The Winnipeg Free Press features an article by Laura Rance entitled “Matter of bacon ‘n’ exit: Not all hog producers will be able to take the federal money and run.” The article is available here.   

September 29, 2009: Manitoba’s Minister of Agriculture, Food and Rural Initiatives wrote to the Manitoba Chambers of Commerce on this issue, stating as follows:   

Regarding Temporary Financial Assistance for Hog Producers, we agree that the hog sector is extremely important as a regional economic contributor and to Manitoba’s agricultural economy as a whole.  I do stress that the Manitoba government is addressing this situation on several levels.  We have initiated a Targeted Advance Payment through the AgriStablity program, a federal-provincial payment that is putting about $37 million into producers’ hands.  We are also contributing an estimated $86.5 million for the 2008 AgriStability and AgriInvest programs and we have budgeted $53.7 million for 2009.  Combined with federal contributions, total payments would amount to $216 million for 2008 and $134 million for 2009.  We expect that much of this will go to livestock producers. 

We have worked with the federal government to respond to country-of-origin labeling by the U.S. and we are providing support to Ottawa as it advances a World Trade Organization complaint over this issue. 

We would also note that the federal government has recently announced a package that includes long-term loans for pig producers, as well as a $75 million program to help producers transition out of the pig industry.

October 2, 2009: The Federal Government issues a news release entitled ”Program Available For Canadian Pork Producers.”

The release included the following:

“We’ve worked in lock-step with the Canadian Pork Council to make sure the details of these important programs hit the target for producers at the farm gate,” said Agriculture Minister Gerry Ritz. “We know the Canadian pork industry can be profitable and that’s why we’re offering government-backed loans to help them weather the current economic storm. But we also know the industry needs to restructure and we’re working with the Canadian Pork Council to deliver funding for those who need to transition to another sector.”

To read the full release, click here.  

To get complete details on the program, access the Canadian Pork Council’s website here.

As well, Welch LLP in Ottawa, ON has established a hotline to provide assistance at 1-866-368-4023. Normal hours of operation are Monday to Friday, 8 am to 6 pm Eastern.

October 8, 2009: The Globe and Mail included an article by Barrie McKenna entitled ”Canada turns to WTO over U.S. label law: Even with recent changes, Ottawa says rules still prompt U.S. food processors to shun Canadian imports.”

The article recounts the challenges facing the hog industry and is available here. 

October 16, 2009: The Federal Government issues a news release entitled “Government Of Canada Invests In International Market Development For Canadian Pork” indicating an investment of $550,000 to support the work of Canada Pork International (CPI).

The release is available here.

October 26, 2009: The Government of Manitoba issues a news release entitled, ”Manitoba Pork Producers To Benefit From $70 Million More In Targeted Advance Payments Through Agristability”

The release includes the following:

“With the new funding approximately 290 eligible producers in Manitoba will be accessing an estimated total of $92 million ($22 M + $70 M). The average advance could now be in the range of $317,000.”

See the complete contents of the news release here.  

October 29, 2009: The Winnipeg Free Press featured a story by  Murray McNeill entitled ”‘Unprecedented’ decline: Manitoba hog operations disappearing.”

The article included the following:

Kynoch [Manitoba Pork Council chairman] said a dramatic reduction in hog production is needed to restore balance to world hog markets, which are suffering from too much supply and too little demand.

The article is available here.

January 23, 2010: The Winnipeg Free Press featured an article by Laura Rance entitled “Provincial livestock capacity a stinky question” that touched on this issue. 

The article stated: 

The numbers don’t tell the whole story, nor do they consider the host of political, economic and social factors. For example, the livestock sector in Manitoba is in a severe state of contraction right now due to economic and political issues. 

Access the complete article here.

February 1 to 2, 2010: A Pork Value Chain Roundtable was held it Ottawa.

A report on the event included the following:

The George Morris Centre provided an assessment of the hog-pork supply/demand situation in Canada and abroad. Over the last few years Canada has seen a troubling trend of lower prices and also declining consumption. A further 10% to 20% decline in live hog exports to the US in 2010 is predicted. It looks like Canadian producers need to reduce costs by $20 per head in order to level the playing field with the US.

AAFC provided an update on three programs of interest to pork sector: Hog Transition, Loan Loss Reserve, and the Slaughter Improvement Program. Participants raised a number of issues regarding these programs. With only 113 producers out of a possible 1,300 taking advantage of the Loan Loss Reserve program, it was questioned whether the intent of the program is being met by the financial institutions. In general, there is a reluctance to take on further debt, when markets are not improving.

CPC discussed the GIRA Report recommendations. The GIRA Report considered what the Canadian pork industry would look like 10 years in the future, if the status quo were maintained. They found that there is not enough flow of information along the value chain, and this is strangling development of the sector. The loss of domestic market share is very problematic: imports of US pork are currently about 13% per annum. The report contained numerous recommendations including the need to educate Canadian consumers about Canadian pork; using the RT to create momentum; and having CPC hold a one day workshop to bring all the players together to discuss and brainstorm.

To learn more about the event, click here.

April 29, 2010: Murray McNeill  of the Winnipeg Free Press wrote an article entitled “Respite for pork producers could be brief.” 

The article touched on the state of the hog industry and included the following:

[Manitoba Pork Council general manager Andrew] Dickson said Manitoba’s increase shouldn’t be interpreted as a sign the hog industry is on the rebound, because 0.8 per cent is within the statistical margin of error.”The best that you can say is that we’ve stabilized. We’re not declining any more.”

He said it’s also too early to say if the worst is over for Manitoba’s producers. He noted hog prices usually peak in the first half of the year and decline in the second half. And forward prices on the futures market for December deliveries are running at between $120 and $125 per pig. “That’s not great (for producers).”

Another concern is the rising value of the Canadian dollar versus the U.S. dollar, which is the currency hog prices are set in.

It’ll also be another three months before Manitoba producers get a clear idea of what kind of impact the recent herd culling in Canada and the United States will have.

There has been an oversupply of hogs in the world in the last few years, and the herd reductions are supposed to bring more balance to the market.

Dickson said 77 Manitoba hog farmers — about one-tenth of the provincial total — were bought out under the Canadian reduction program launched last fall. That should see about 46,000 sows removed from the provincial inventory, and sows usually have an average of 25 piglets per year.

You can read the entire article here: http://www.winnipegfreepress.com/business/respite-for-pork-producers-could-be-brief-92393534.html.

Final Report:

It is probably fair to say Manitoba’s hog industry remains under some duress (see “Developments: April 29, 2010″ above). While there is not a Resolution for 2010-11 on this topic, the MCC will continue to work with the Manitoba Pork Council and our other members to support this important industry.   

Given the government initiatives described in this report, this Resolution has been a qualified success.