Quibbles create inertia

Government urging harmony - and long-term vision - among swine industry's producer-processor-packer stakeholders
BY ROBERT IRWIN
The Ontario government has been working behind the scenes to heal a rift between the pork board and packers, but the province is a long way from a once-hoped-for Quebec-style pork industry roundtable. Bill Allen, assistant deputy minister Food Industry Division, OMAFRA, wants the Ontario industry to focus on "the longer term future of the industry rather than what's the price of pork going to be in the next month."

How the pork industry reached this point over the past year is a tale of frustration and inertia.

Quebec's roundtable, which most of that province's pork industry is generally enthusiastic about, brings all players together - packers, producers, government, organized labour and researchers.

If they "don't communicate and work more closely with our hog producers, Canadian packers will soon depend on American hogs," outgoing Canadian Meat Council chairman Bill Mulock warned his members at the CMC annual meeting in Ottawa earlier this year.

Mulock urged his members, who account for 94 per cent of federally inspected hog slaughter, to look to Quebec, which he described as the only place in North America that "achieved a balance in hog production and plant utilization" when prices crashed.

Ontario Pork tried to consult industry stakeholders including bankers, processors, feed supply companies, veterinarians, transport companies and Christian Farmers Federation of Ontario at a Dec. 8 meeting to consider a report prepared by Serecon on the future of the industry. Farm & Country has learned some industry stakeholders weren't up to speed on the issues, so government officials and pork board directors spent much of the meeting fielding elementary questions.

Ontario Farm Products Marketing Commission (OFPMC) documents obtained by Farm & Country under Ontario's Freedom of Information and Privacy legislation reveal pork board directors "appeared to have very little will to decide [on Serecon], as well as a lack of confidence."

Allen says nothing came of the meeting. The pork price crash intervened followed by the Quality Meats strike.

"The message we got back was we're just worried about survival," Allen recalls. Some pork board directors were apparently ready to fire a salvo at packers by halting direct producer-packer contracts as early as Dec.15, 1998, when prices were bottoming. "Many board members believe the balance of power in the industry has shifted away from the board as a result of contracting and is now in the hands of Maple Leaf Foods," the OFPMC documents reveal.

Around the same time OFPMC, which oversees the province's marketing boards, was warned by board chairman Will Nap and vice-chairman Clare Schlegel that the commission "may soon be under considerable pressure from producers" over contracting.

An OFPMC briefing note dated Jan. 15, 1999, shows the commission viewed any effort to halt direct contracting as "a reactionary response on the part of producers and the pork board. Prior to this time of crisis they did not express any concern regarding the level of contracting in the industry," the note concludes.

OFPMC concluded contracts with Ontario packers weren't the cause of the price crash, which was at the time affecting the whole continent. They also reasoned contracts are legally binding and overturning them would create problems for both producers and packers.

Outwardly, things still looked promising for an industry accord as recently as last February, when a hastily assembled group of Ontario producers returned with favourable impressions of the Quebec roundtable after meeting with key Quebec counterparts and industry officials. Some Ontario Pork directors publicly claimed the pork board's plan for industry collaboration, the Ontario Alliance, would soon take off.

When it became obvious the Ontario Alliance was doomed, OFPMC chair Don Taylor and Bill Allen held several meetings with key players. On March 19, 1999, they sent four identical letters to Maple Leaf Pork president Patrick Jones, Quality Meats president David Schwartz, Ontario Pork chairman Will Nap and Leo Rocheleau, president Ontario Independent Meat packers and Processors.

The letters refer to earlier meetings between the parties and the "Ministry's interest in initiating an industry strategy development process." The letter suggests formation of "a strategy committee" made up of "participants from the genetics, feed, primary processing and further processing sectors."

Allen and Taylor proposed three to four meetings over a three-month period, chaired by a facilitator, so that ministry officials could attend and participate. Those meetings never happened.

"You might think something should have happened a long time ago, but just getting people to agree that we needed to think long term has taken more time than we anticipated," Allen reveals.

Late June, the only result Allen has is "nobody has said no." He now sees the parties getting together for a preliminary meeting followed by an intensive day- or day-and-a-half-long meeting, perhaps "sometime this fall."

© copyright 1999 Agricultural Publishing Company Limited.



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U.S. producers plan kill co-ops

National Pork Producers Council (NPPC) got World Expo in Des Moines off to an exiting start last month with a surprise announcement of plans for three state-of-the-art slaughter and processing plants that might handle as many as 13.7 million hogs a year. The plants, which would slaughter, process and market fresh pork and pork products, would be owned by what NPPC terms "a new generation value-added cooperative."

Ontario Pork chairman Will Nap likes the American initiative. He predicts it will offer "an alternative to producers for finding appropriate prices. Certainly it's feasible. Denmark has been on that system for many many years."

The traditional co-operative principle of one member, one vote would be replaced by proportional voting. NPPC, which represents more than 80,000 U.S. producers, blames the loss of eight per cent of U.S. processing facilities over a 24-month period for the recent crisis in the pork industry.

NPPC chief executive officer Al Tank predicts more slaughter capacity will be lost in the next two years with further closures of old, inefficient plants. "By the year 2002, the industry will need new slaughter capacity, and it doesn't look like other packers will provide that needed capacity," Tank observes.

It is not clear whether producer check-off funds will be used to fund the project. NPPC is appointing a task force to explore this as well as location of the plants and overall feasibility. Tank says United States Department of Agriculture is supportive of the idea.

He says NPPC hopes to attract funding from state and federal governments and is eyeing a program that provides start-up money for co-operatives.

"It's not going to be easy, but we don't see anyone else stepping up to the plate. We know everyone is not going to like this idea. But doing nothing is not an option. We simply cannot stand to repeat what happened to us in 1998," Tank warns.

One proposal being discussed involves three plants each slaughtering 8,000 hogs per day, five days a week. Another would see three plants, with each handling 6,000 hogs per day.

By running a double shift, capacity would reach 13.7 million pigs for the first option or 10.3 million for the second. Models for the co-operative structure include Ocean Spray, Goldkist (the second-largest broiler producer in the U.S.) and Danske Slagterier, the Danish producer co-operative that owns and controls all slaughter capacity in Denmark.

Nap notes competition among processors has waned in recent years as some amalgamated and others left the industry. He doesn't expect U.S. producer-owned plants to buy Canadian pigs, but he predicts Ontario producers will benefit if the plants force U.S. hog prices up or if they "create opportunity in some of the other packers."

Nap believes Ontario needs additional processing facilities. He says Ontario Pork has been talking to Smithfields and several Quebec packers about locating in Ontario. "Nobody's said no, but nobody's said yes, either."

Would Ontario Pork follow the NPPC lead and set up a producer-owned plant in Ontario? Possibly, Nap speculates, "but so far it hasn't been the will of the board to do that."

Ontario producers were involved in a short-lived co-operative processing venture called FAME, which collapsed. "FAME has left a bad taste in people's mouths," Nap observes.

"Anybody can slaughter hogs, but can you market the product?" Nap challenges. NPPC officials see marketing as a challenge for their venture. At this stage they are considering development of a name brand or the possibility of working directly with pre-established end users.

Nap says the pork board is anxiously awaiting details, expected this fall, on long-standing plans by Ontario's 3-P co-operative to build a plant. - Robert Irwin

© copyright 1999 Agricultural Publishing Company Limited.



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Cloning for fine vines

By CHRISTINA SELBY
The search for the ultimate grape is ongoing at Château des Charmes' Niagara-on-the-Lake winery. Testing of vinifera clonal varieties taking place there will eventually provide grape growers with the data they need to make vine purchasing decisions.

John Paroschy, Château des Charmes' resident scientist, has been researching clonal varieties for wine-making potential, over-wintering and overall quality since 1982. "Choosing the best clonal variety is one of the most important long-term decisions a grape grower makes," Paroschy told industry members at an informational wine tasting last month. While a clone is defined as an exact genetic replica, in grape production clonal varieties are the result of a different trait turning up in a clone.

The vine with this trait is then cloned and tested for genetic stability. Château des Charmes has its own registered clonal variety, a gamay noir vine that grows upright, which means it gets better sunlight and air, and is easier to harvest.

The CanAdapt program came on board two years ago with about $480,000 in funding for the $2 million project, said Tom Greensides, director of the Agricultural Adaptation Council, which oversees the program. "The grape industry has invested $100 million in the last nine years into their vineyards," Greensides said. With an estimated cost of about $14,000 per acre to bring a vineyard into production, "you can see why it is so significant."

The varieties being assessed are chardonnay, sauvignon blanc, aligoté, riesling, cabernet franc, cabernet sauvignon, merlot, gamay, pinot noir, savignin and viognier. Paroschy acquired 60 clones of certified virus-free stock from France, and the number of clones of each variety depended on availability, said Paroschy.

Data was gathered on grape maturity, bunch weight, bunch density, bunch rot, grape rate per vine and cane maturity of the different clones. Qualitative aspects included grape sugar content, juice acidity, colour extract and tannin extract.

But a big concern of grape growers is winter loss, as a January temperature drop to -24C can result in the loss of 50 to 60 per cent of buds, said Paroschy. Since the last two winters have been relatively mild, clone cuttings were frozen once a month for four months - December to March - to see how the plants weathered cold temperatures.

About 100 buds, the most temperature-sensitive part of the vine, of each variety were frozen at C temperatures of -18, -20, -22, -24 and -26 and the average bud survival percentage was calculated.

Bud temperature was decreased by two degrees per hour, then left at the test temperature for two hours before being warmed up again. "I tried to simulate what would happen out in the field," said Paroschy.

Generally, whites did better than reds, but that's not true of all clones, he said. One major factor is the dormancy period of the variety.

A warm spell at the beginning of March can move the vines out of dormancy, so that if colder weather returns losses can be high, said Paroschy. Buds that can withstand -24 in January can die at -14 in March depending on their level of dormancy.

Rieslings have generally performed well, whereas merlots tended to be at the low end of the bud survival scale, he said. But with only two years of data - and with so many variables to assess - these advantages are not written in stone.

"Some of the clones of a weaker variety have tested better than some stronger varieties," he said. Of the reds, cabernet franc and cabernet sauvignon are performing well, "and the pinot noir has come out ahead a few times."

Paroschy said that trends have been identified with the first two years of testing and that the next few years should solidify the findings, "but 10 years would be ideal."

The research could also help other fruit growers. The Château des Charmes testing has established benchmarks for collecting data on fruit quality and winter hardiness. "I'm sure you could use this sort of technique with pears or apples," said Paroschy.

Along the way, many of the commonly held opinions of grape growers have been confirmed. Greensides said he's always believed that the sweeter the grapes, the more winter hardy the plant. This research has now proven that to be true, he said.

Vines producing grapes with a 24 BRIX will generally survive winter better than those with 20 BRIX grapes, according to Paroschy, because as long as the grapes are not overcropped, additional sugar will build up reserves in the cane.

Another commonly held belief among grape growers is the correlation between bunch density and grape rot. Basically, the more dense the grapes are on the bunch, the higher the frequency of grape rot. "But now we have the data to back this up," said Paroschy.

The ultimate test is in the glass; about 100 wines made from the various clonal varieties in 1997 and 1998 will be tasted and assessed over the next couple of months, said Paroschy.

"We always have to concern ourselves with the end product. It would be like producing a piston without concerning ourselves with the rest of the engine," said Stephan Bosc, director of operations at Château des Charmes.

© copyright 1999 Agricultural Publishing Company Limited.



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Wine school uncorks new digs

Brock University's Cool Climate Oenology and Viticulture Institute has moved to new digs. The $6.1 million Inniskillin Hall opened last month in St. Catharines, and will provide state-of-the-art research labs and facilities for future wine technicians.

The viticulture program was established in 1996 and will graduate its first class of eight Bachelor of Science students next year. In 2001, 15 students will graduate from the program, which William Cade, dean of the mathematics and science faculty, says is about the right size for the program.

"We don't want to produce more graduates than the industry can employ," he says.

Program participants are chemistry and biology students who have often completed their first year of study at other universities before transferring into the only viticulture program in Canada. Beyond the program's science component, there's real-world, hands-on training: Students are required to intern at area vineyards and make their own wine.

Cade wants the wine industry to see Inniskillin Hall as part of their community. There are conference and tasting rooms on-site for use by the various area wineries. The hall will also house the Ontario Wine Library, the province's most valuable vintages. The $250,000 wine cellar was sponsored by Canadian Pacific.

"I'm very open to industry using the facility, particularly when you consider how much the industry has contributed," he says. Ontario Grape Growers Marketing Board, Inniskillin Wines and the Wine Council of Ontario have jointly pledged $480,000 over five years to the program. Initial funding for the project came from the Ontario government's Research and Development Challenge Fund and the Canadian Foundation for Innovation: Each provided $1.545 million.

"I expect the facilities will eventually be used a lot by people in the industry looking to upgrade their skills," says Cade. There is a certification program in grape and wine technology available to people already employed in the wine business.

© copyright 1999 Agricultural Publishing Company Limited.



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Quota transfers frozen as chicken markets soar

Broiler quota transfer in Ontario is currently in a holding pattern, pending a decision by Chicken Farmers of Ontario on the conversion of additional quota into basic quota.

Demand for broiler production is continuing to grow - Chicken Farmers of Canada recently announced that per capita chicken consumption climbed to 26.1 kg in 1998, an increase of 0.7 kg over 1997. As a result, CFO has been handing out additional - meaning free-of-charge - quota to producers on a per capita basis. But that method of filling the gap between supply and demand is currently under review.

In a notice to chicken farmers dated May 28, the board announced that no quota transfer applications would be accepted after 11:59 p.m. on May 29 until such time as a new conversion policy was developed. "It's time to look at the distribution of growth - present and future," says Tom Posthuma, CFO chairman. The board has been distributing additional quota as the need arose, but in the last few years, "it's been getting larger and larger," says Posthuma.

Quota transfers were temporarily frozen to "prevent speculation" and provide for orderly change to the system, he says. "That gives us time to confer with producers. We need to decide what to do with the kilos that are out there and what to do in the future."

While a couple of distributions in the past have been done on a pro rata basis, "by far the majority have been per capita," says Posthuma. The options are to maintain the status quo, distributing additional quota as necessary; turning the existing additional quota into basic quota and moving to a pro-rata system; or a combination of the two.

While hoping a plan for the future would be in place end of June, Posthuma acknowledges that any decision reached is still subject to approval by the Farm Products Marketing Commission.

Transfer requests received by the board before the deadline "that are otherwise in order as determined by the board, will be considered in applying the new conversion policy," according to the notice. - Christina Selby

© copyright 1999 Agricultural Publishing Company Limited.



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