Pork producers want a cut of packer profits

The four western Canadian provincial hog producer groups are asking three major pork processors for a larger cut of the value of each hog.

The boards of directors for the B.C. Pork Producers Association, Alberta Pork, Sask Pork and Manitoba Pork Council have sent a letter to Maple Leaf Foods, Olymel, and Donald’s Fine Foods in order to “seek a solution to the long-standing need to share the value of the pig.”

In the letter, the boards call attention to major discrepancies between pricing formulations of hogs between provinces that can add up to a price difference of $100 per hog. At the same time and during the crisis of COVID-19, the U.S. is posting record cut-out prices in the face of depressed live pig prices. The current system, they say, means that producers must rely on the “goodwill” of governments to support producer survival, leaving producers unable to continue to invest in infrastructure and the industry.

The boards have asked to meet with the leadership of each company by the end of June.

“It is our hope that we can change the system in Western Canada to better reflect a value sharing model that incorporates the cut-out value for the betterment of both the producer and the packer,” the groups say in a press release. “Producers, like packers, cannot invest back into their farms and address market and societal demands if they are not able to be profitable and sustainable.”

The group hopes to move past the historically antagonistic relationship between producers and packers and work together, sharing value along the value chain.

The producer groups have also formed a small working group to develop “options to strengthen the industry and improve our way of working together” with processors.

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