Producers seek answers

Don Stoneman western Ontario bureau chief

Mitchell Ontario -Dec. 18 1998
The party room at the community centre in this town in the heart of Perth county is usually home to wedding receptions, baseball and hockey dances and the odd 50th anniversary party. Last night, it overflowed with the largest gathering of Ontario pork producers in recent memory.

Perth and neighbouring Huron counties produce about 30 per cent of the province's pork. There is a huge producer base within an hour's drive. Ontario agriculture ministry officials estimated the highly-charged crowd in Mitchell Thursday night at between 450 and 500, thought to represent farms producing 60 per cent of the market hogs in the province. More than 300 chairs set out, and producers continued to pour into the room after they were filled. At least 150 stood during the meeting which ran from 7:30 to 11:30 PM.

Such is the extent of the disaster that is running through the North American swine industry now. Such is the highly charged nature of those farmers who are now seeing their industry, their hopes, their dreams and their investments, go down with the sinking price of pork.

The speakers for the evening ran the gamut, from provincial government officials who deal with their federal counterparts in negotiating farm bailout programs, to producers who simply fear that they will lose their businesses before prices turn around again. Here is a summary.

A FINANCIAL PACKAGE
There is a financial package coming, but it sure won't be in time for this Christmas.

Federal and provincial negotiations still go on.

David Hope, director of the policy analysis branch, Ontario agriculture ministry, is the provincial official who negotiates with the federal government on safety nets. He said the province felt that because there is was no whole farm program in place in Ontario, it would take until next summer before benefits would flow into farm hands. Hope said cheques from the province's $40 million fund will be in the mail in mid-February.

The applications will be out in mid-January, Hope said. an processing will begin the end of the month. The farm business registration list will be used to send the applications to farmers.

In meetings this week, Hope said, there was some sense gathered of what the program would be about.

First, it is a whole farm program. All commodities will have access. If an aid package were aimed at hog farmers only it would be countervailable, and a countervail by the U.S. would continue to depress prices for years to come.

Three provinces already have whole farm programs in place: Alberta, British Columbia and Prince Edward Island. These three provinces have programs in place which support them at 70 per cent of the three previous year's average gross income, minus costs. Don't worry about your year end. It won't affect the payment, Hope said.

There needs to be a way to accommodate new participants, those without a three year history of income. "The details are not all worked out," Hope said.

It seems likely that there will be a cap in payments, a maximum of $100,000 per operator, and a maximum of five operators per farm business. It is likely important to have financial affairs in order as quickly as possible. "The more completely you can produce information the more quickly we can process the application."

The linkage between programs is still an area of discussion, Hope said. Hope does not anticipate that NISA accounts will have to be emptied before a federal payout can be made.

WHERE ARE THE PIGS GOING?
Ian Muir, director of sales and marketing for Ontario Pork, warned that there is no reason for the price of pork to change dramatically unless the packers start supporting the industry. Muir is a newcomer to the board, he started on Aug. 17, just about the same time that the pig price started to slip, and it has been downhill ever since. Muir admitted some pigs "are marketed" and some "are just sold."

He aimed a few barbs at packers. "The packing plants are doing well now. No one will deny it," he said.

Muir said the chain stores "price to be competitive." There has to be a change in the amount that the packer pays for the pigs so that more of that money goes to producers, he said.

Unfortunately a lot of pigs have had to be sold to the U.S. There are a lot of plants in the U.S. that are closer to Ontario than Winnipeg is, Muir said.

The National Pork Producers Council has made Canada into a whipping boy for the U.S. industry's problems, Muir said, even though Canadian pork is a very small amount of U.S. slaughter. "It's unfortunate that the NPPC (National Pork Producers Council) gets recognition for a job well done," Muir said.

Quality Meat Packers are giving up a lot of opportunities to make profits right now, Muir said. Their Bramalea plant is striking in sympathy, even though workers there had already signed a contract. Muir estimates Quality's losses during the strike at $1 million a week, just on the slaughter side.

PACKER NEW BOOGIE MAN
Pork producers are looking for a boogie man in this market downturn and the bogeyman has changed from retailers to packers. Michael McCain, head of Maple Leaf is about as popular among the farmers at the meeting last night as Pseudorabies.

So are loops and contracts with packers. A show of hands among farmers at the meeting last night revealed that just about everyone present felt they were "family farmers." Barely a hand was raised when a call when up for those farmers in "loops" were asked to show themselves.

There were a few words spoken in packers' favour. "We are short 100,000 hooks a week," said one farmer. It's not they don't want to give us the money. They don't have to give us the money. Get them up and working 60 hours a week."

SLAMMING CONTRACTS
John Colyn, a former pork board director from the Niagara Peninsula, blamed contracts for ruining markets, and said the pork board was as much to blame as anyone. "We gave it away on a golden platter," he said. "Are we going to dig in our heels and get it back?" Farmers have to stand together and not be tempted into undercutting their neighbours with "a dime here and a nickel there."

Disaster's foot was in the door when the pork board began allowing contracts, Colyn said. The first year only 10 per cent of pigs were to be allowed to be sold by contract directly to packers, Colyn pointed out. But by the end of the year, 17 per cent of pigs were sold that way. The pork board said that was what producers wanted, Colyn said.

Colyn put local pork board member Clare Schlegel on the spot. Schlegel was forced to admit that the board wouldn't meet again during this industry disaster until Jan. 15. "I'm a board supporter, I really am. But the months go by," Colyn said.

PRODUCER PROCESSING?
Farmers are starting to ask questions about owning their own plant. There are no quick answers. Waterloo county pig farmer Bob Hunsberger, did his best to respond to questions about the PPP plant. The co-op now markets 8,000 pigs a week, and the co-op's goal is to kill its members pigs. At this point the co-op is legally prevented from taking on new members. At any rate, any kind of pig killing facility is a long way off. A feasibility study is going to be finished by June, Hunsberger said. "We will be looking for a partnership with someone with experience in packing and markets." August is the next key date.

One of the questions that will be answered by a feasibility study is whether a new facility should be built or an older one renovated. One farmer asked a very important question. How could the PPP group buy a plant without a plan on what to do with it? Hunsburger didn't have a good answer to that question.

GOING BROKE?
A figure who kept on showing up and over during the meeting is John Donkers, a young and vocal producer from the Mitchell area. "August is a long way away," Donkers said. "A lot of us won't be here any more. That kind of sucks."

Donkers told the meeting in a very emotional speech that he did not know how long he could stay in the business. "I talked to my banker. She was in tears. I want to know when she will pull the plug on me.

"I don't even bother to weigh my pigs any more. What's the point?"

LOOKING AT QUEBEC
Another speaker was Hammond pork producer Robert Perras. Perras has received widespread publicity because he has gone to the trouble to make a lot of phone calls to Quebec to figure out their stabilization system. Perras had the rapt attention of the audience as he described how the Quebec funded stabilization system kept returns to farmers high every time there was a market downturn. The effect was that the province's industry kept growing, while producers in other provinces struggled to hold their market share. The Quebec goal is to market six million hogs a year, Perras said.

ONTARIO PORK'S ROLE
Ontario Pork leaders did their best to keep a lid on the meeting. A list of questions had been circulated at the start of the meeting and Zurich producer Jody Durand did his best to turn the strong sense of urgency at the meeting into action by turning those questions into resolutions. There was unanimous agreement that the provincial government should order Quality Packers back to work. Then pork board head Paul Knechtel stood up at the microphone and urged the producers to go slowly. He said that provincial leaders had been impressed by the simple, straightforward message that had been voiced at the rally in Queen's Park Dec. 1 and he urged producers not to muddy the waters by sending a plethora of messages to Toronto and Ottawa.

Another resolution by Durand to put a floor price of $1.20 a kg under hogs stalled because of fears it would encourage even more pork production. Then an unidentified producer stood up and warned that the pork coming from a plant where workers were forced back to work would likely be unsuitable for marketing. He was met with more than a smattering of applause. So it was apparent that the feelings of the meeting were easily swayed by whoever was at the microphone at that moment.

SO WHAT WILL HAPPEN?
It's questionable as to how much effect Brian Simpson, Shamrock Genetics, had on the meeting. Watch the news next week. Simpson suggested taking pigs to the local humane society, telling them you couldn't afford to feed them, and calling the TV station first. "If you did that every day (somewhere in the province) for a week or two, don't you think there would be some action?"

Another possibility is taking pigs to your local MP's office. "I'm not suggesting this to anybody," he said, tongue firmly in cheek.

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