Ottawa, November 23rd, 1998 "Every player in the Canadian pork industry must make every effort to help address the current collapse in hog prices" urges Edouard Asnong, President of the Canadian Pork Council. " Producers are facing exceptionally low prices and there is no immediate relief in sight. Action needs to be taken immediately to help producers through this unprecedented period in a way that will able the industry to realize its outstanding long-term potential as a world-class pork-producing country."
Mr Asnong explained the price collapse as being the result of an extraordinary convergence of a number of price-depressing factors such as: higher hog numbers than what current processing capacity in the United States was permitted to handle; depressed demand in Asia and Russia given economic crises in those areas; and recent increases by the European Union to the already massive subsidies they provide for their pork to be exported.
"The U.S. National Pork Producers Council must be commended for their leadership and determination to address the current crisis of hog prices", said Edouard Asnong, President of the Canadian Pork Council in response to a recent release. The American hog farmer organization has appealed to the President of the United States to intervene. They have identified such alternatives as increasing hog processing in the immediate term, and increasing U.S. government purchases of pork for foreign humanitarian assistance. They are also urging U.S. packers to operate longer work weeks, and have asked that fewer live hogs be exported from Canada to American plants.
Mr. Asnong said: " Canada needs to do its part. We operate on a North American market, and we, along with our U.S. counterparts, need to take steps to move the industry through this disastrous situation. Each party that has a stake in retaining a hog production industry in this country must join with us in finding solutions to ensure that all of our own domestically produced hogs can be processed in this country. These parties include packing houses, exporters, federal and provincial governments, food retailers and restaurant operators, and the sectors providing inputs to hog producers such as feed companies and the banking industry."
The need to increase our processing activity here in Canada was discussed on Friday at a meeting of Canada Pork International (CPI), the sector's export development arm. "We are certain that substantially more hogs can be processed in this country", concluded Mr. Asnong.
The discussion at CPI led to a request to Agriculture and Agri-Food Canada to call an emergency meeting of the Hog/Pork Industry Round Table to discuss measures that both industry and government need to adopt to address the emergency. In addition, the hog producer organizations will be meeting as soon as possible with individual meat processors to identify what each company can do to immediately increase the number of hogs they process. "This is a time where everyone must be seen to be doing his or her share to address the crisis", said Mr. Asnong. "The very survival of a major portion of our producers is at stake".
What is surprising is that domestic pork prices have not come down in any appreciable manner given hog prices are currently more than 60% down from last year. "We have arranged meetings with food retailing representatives to discuss this situation and to discuss what constraints retailers face and how we can cooperate to enable more pork to be sold here in Canada" said Mr. Asnong.
The farm financing sector plays a particularly crucial role as well at this stage. All forward indicators, such as the hog futures markets indicate that prices will return to levels that enable hog farmers to very soon meet at least their cash cost obligations with further improvements to follow. "The task before us right now is to enable producers to get through these next few weeks, knowing that the current severely inadequate returns do not nearly meet hog farmers' payment obligations to suppliers", said Mr. Asnong, who finishes hogs in the Ste-Hyacinthe region of Québec.
The CPC met recently with the Farm Credit Corporation and from that session it was concluded that FCC is committed to being as reasonable as possible in dealing with producers having farm debt payment difficulties since the hog price collapse. However, chartered bank representatives have yet to even respond to correspondence the CPC sent in October where the Pork Council offered to meet with them and present the same information given to FCC on market conditions and trends as well as other initiatives the Pork Council is pursuing. The CPC could then hear from them what are the banks' concerns and intentions, and to discuss alternatives for dealing with the situation with a minimum of loss of existing producers.
"Having pointed out the responsibility of industry to respond to the crisis, governments - both federal and provincial - have a major role to play", concluded Mr. Asnong. The CPC first asked the Prime Minister in October that Canada contribute its fair share, along with the U.S. and the European Union, to providing food aid to Russia, a country that had been the world's largest meat importer prior to the onset of its economic and potential food availability crises. In separate meetings later this week with Members of Parliament from all five national parties, the Pork Council will emphasize the messages which need to be sent to those in authority that these, and other, 'counter-disaster' measures be put in place.
And with respect to continental trade, a vitally important factor to ensure an efficient distribution of the hog processing activity given the current surplus, Mr. Asnong indicated: "Canada and the United States must remove and avoid any unnecessary trade barriers in response to the current economic pressures. Wherever possible, U.S. packers should be able to process Canadian hogs, and vice versa."
The Canadian Pork Council is the national federation of provincial hog producer associations, including: Alberta Pork Producers Development Corporation; Fédération des producteurs de porcs du Québec; Manitoba Pork est; New Brunswick Pork; Ontario Pork; Pork Nova Scotia; Prince Edward Island Hog Commodity Marketing Board; and SASK Pork.
For information:
Martin Rice
Catherine Scovil
CPC, Ottawa, 613-263-9239
Edouard Asnong
President, 450-248-2375
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