LETTERS
Thanks for the laugh
Re Help is as Close as the Telephone, Farm & Country PORK, Nov. 16. I had to chuckle at the helpful advice from Marilyn Jonas of Saskatchewan's Pork Central. Here are some items I can share with fellow producers in this financial crisis that have helped our bottom line:
* Rearranged our bins for prepared feed to allow for a separate lactating sow ration, which we hadn't had before because of our small herd.
* Paid close attention to heaters and thermostats in the nurseries in the fall season. A few degrees can make a big difference. One thermostat was lowered closer to the pig level, and new orifices installed in the propane heaters.
* Butchered an extra pig, instead of eating chicken.
* Ordered next year's seed from a company that offers financing at prime minus three per cent until Dec. 1, 1999.
Clarence Schuurman,
Tillsonburg
Don't blame the big guys
As recent hog issues and general farm price disparity take centre stage, I have heard considerable grumbling that "the big farmers" have caused the current glut of hogs; that the "large new immigrants" have added unnecessary hogs; and that "they" had better not ask for, or receive, any special treatment or financial handouts from government.
These are childish arguments often spawned by jealousy and sour grapes, and oblivious to the big picture. The social changes and continuing concentration in the agricultural processing sector are the results of a global food system that is pitting farmer against farmer and country against country.
Our food system is like an hour glass - a lot of producers at the top, a lot consumers at the bottom, but few processors and few firms in each commodity in the middle.
When four firms have 40 per cent, there is no competition. They do not have to talk to one another and collude; when one acts, they all act, and the results are real, visible and apparent.
Today, you can see vertical integration from gene to seed to farm to processor to retailer. See One-stop shop.
These few transnational corporations (TNCs) represent the waist of the hour glass. According to William Heffernan, professor, department of rural sociology, University of Missouri, these figures are harder to get every year as they are becoming more closely guarded by the firms and government alike. Cargill handles 25 per cent of global grain movement and Continental had 25 per cent. Archer Daniels Midland (ADM) has more than 25 per cent. On Nov. 11, Cargill stunned the grain trading world by announcing its acquisition of Continental. Two firms now control 80 per cent of global grain movement.
In the U.S. poultry industry, 38 firms have 240 processing companies that process 98 per cent of U.S. chickens. In reality, there are only 38 chicken farmers in the whole U.S.A.
The U.S. poultry farmer is just a labourer. He gets 3.5 to 4 cents per pound to raise broilers and hasn't really had a raise since 1982. He puts up the buildings, takes on mortgages and risks and waits for a 15- to 20-year payback, and all the while his contract price is just from contract to contract. Usually, he has no choice in who builds the barn and whose equipment is in the barn.
Larger is not more efficient; larger is more powerful. ConAgra is getting a 23-per cent return on investment (ROI). Farmers may get three to 4.5 per cent. Pharmaceutical firms enjoy the largest ROI.
How has this lopsidedness and concentration happened? TNCs have a long-term vision. Governments get easily sidetracked and usually only look from one election to the next. These large corporations can influence governments because they have more stable, long-term management than the government. Food is power, real power. It is a necessity and it is needed daily.
What has this to do with farm parity pricing? The larger operators I talk to know what is going on. They know how much it takes and likely will take for their sons and families to make a living on the farm. They know that margins are continually squeezed and that costs continually go up. They have found out thatmost of the new technologies are not size-neutral - only the larger farmers can afford them. They have realized that size is power and they know that large size is not necessarily more efficient, but they know what power they will need to wield if they have any hope of dictating any terms to the few remaining firms in the ag processing business.
Their frailty and Achilles heel is the loop and contracting business. These disastrously low prices will further herd more farmers into the contracting business where a known return is what the banker demands. He ends up no different from the Arkansas chicken farmer: just a different commodity, just a different form of slavery.
The family farm has turned into the family that works on the farm. What's the alternative? Just look up and down the local concession roads. Those farmers who didn't expand, who maintained the status quo, who made no provision for the next generation, are off the farm or soon to be off the farm, and so are their sons and daughters.
Don't come down too hard on the fellow who is trying to expand his operation and yet call blameless the corporations of the food sector. Those in Canadian supply managed sectors - turkey, poultry and dairy - have been able to keep the wolf from the door, but the sharks are gobbling up the processing sector. Just look around.
Supply management does not result in price gouging the consumer. It protects those farmers from the sharks and prevents the consumer from being gouged. In the current free enterprise system we have right now in the hog industry, both the farmer and the consumer are being gouged. Pork should be priced 30 per cent less in the supermarket.
What everyone wants is clean air, clean water, a clean environment and smaller family-run farms, yet when we go to the grocery store and buy the cheapest, we vote against everything we've asked for.
What we need is a reaction to capitalism's commodification of everything and everyone - right from gene engineering and patenting of life, through to this dangerous concentration in the ag sector.
This is where government comes in: Not only to provide safe borders and a stable currency, but to keep the "big ones" from eating the "little ones," to keep the strong and powerful from taking advantage of the weak and unprotected.
The global food system is pitting farmer against farmer, country against country. This is not a farm issue; this is a food issue. We must act now before it is too late.
Mervyn Erb,
Huron AgVise,
Brucefield
© copyright 1999Agricultural Publishing Company Limited.
back
"What do you hope was accomplished at Rally '98?"
"My biggest beef is when some other areas of the country have some stabilization programs. I'm not after money. I like to see the marketplace take care of things. But if we're not on an equal footing, it's not quite fair...We've had good years - I'm the first person to admit. I assume that the packers probably aren't making as much money as you think they are. I think it's the next step. I think it's the wholesaling and I think it's the retailing. I think that's where the money is made and I think that's where the gouging is done."
John Muller (r),
Farrow-wean, Shipka
"We need enough packing capacity for our hogs in Ontario. [Retailers] say in the past it's hurt them when they react too fast to the situation, so now they look at pricing maybe three or six months. They're not going to adjust it for one month that it drops down, but in this case that should be something that should be looked at. If [price] drops in half, then it's cause for a reaction there."
Ron Masschelein (m),
Farrow-finish, Parkhill
"We want to make sure that the people in the city know what we're getting for our product, and if it continues where it's at, farmers are going to starve on the farm. Every barn that hasn't seen a hog for five or 10 years, or a cattle feedlot is full of pigs right now, and that's not going to be. Everyone thought with cheap weaners they'd make a buck, but it didn't turn out."
Joris Masschelein (l),
Farrow-finish, Parkhill
© copyright 1999 Agricultural Publishing Company Limited.
back
A friend in need
Royal Bank and Bank of Montreal; Cargill and Continental Grain; Hoechst and Rhône-Poulenc - billion-dollar trips to the altar among farmers' multinational suppliers are routine these days. Whether or not the marriage papers are finally signed, the corporate courtship is as familiar as a Love Boat rerun: "Synergies" (read layoffs) make this a merger made in heaven (read Wall St.).Whenever farmers, however, seek competitive strength in numbers through marketing structures such as co-ops or marketing boards, they become "monopolies" ruthlessly "gouging" consumers and processors. It's an age-old refrain, but with Canadian dairy farmers' recent bid to raise milk prices $2.88 a hectolitre, processors, restaurateurs and retailers, and their choirboy Financial Post editor Terence Corcoran, are dusting off the song sheets.
Verse One: Retailers shouldn't have to eat a five-per cent increase. Verse Two: Rising dairy prices "are defeating our best efforts...to cut costs and provide greater value to consumers." Chorus: "The markets are very tender at the moment."
A familiar refrain, but not one for reeling Ontario pork producers to tune out. Where are these same retailers when pork markets went "tender"? Where was the compassion for the consumer when the pork-retail price spread soared? The Barn in Burlington recently ran a $2.99 a pound special on boneless pork loin.
While Canadian supply managed producers nervously await the outcome of World Trade Organization talks beginning this year, Ontario pork producers are already taking a sober second look at the Serecon proposal to dismantle their half-century old single-desk sales system. In the weeks leading up to the Ontario Pork annual meeting in March, there were growing calls for a Quebec-style alliance with processors, producers and government, where Ontario Pork would own all pigs and allocate to processors using a formula price.
As correspondent Mervyn Erb (page 5) says in a letter to this magazine, Ontario pork producers are the sand at the top of an hourglass, trying to ram pigs through the two packers in the narrow middle.
With only two main packers left, and one of them on strike in December, producers are best served by a single strong sales agent for Ontario's hogs. Despite its harsh critics, the marketing board is quickly becoming a friend in need, finding a home for hogs when Thorn Apple Valley stopped slaughtering in June, and during the four-month Maple Leaf strike last year.
Farmers are forever being told they are a business like any other. Then shouldn't what's good for the bankers, grain merchants and pesticide peddlers be good for them as well?
Go figure
Any self-respecting pork producer will tell you his pig is worth 10 cows any day.When it comes to municipal manure bylaws based on animal units per acre, however, he just might want the equation reversed. The 40-year-old animal unit, a measurement used by enviro-regulators to determine minimum separation distances, minimum spreading acreage and other red tape, may need rethinking, according to a report from the Quebec Animal Production Council cited in the Quebec farm weekly Terre de Chez Nous.
The traditional yardstick has been an animal's liveweight, with one livestock unit equalling 500 kg of animal. On a liveweight basis, one cow would equal five finishing pigs.
A more accurate yardstick, says the report, would be based on nutrient output per animal. With genetic and nutritional advancements over the past 25 years, however, manure output per pig has declined, while cattle, fed for maximum milk production, produce more than ever.
If one animal unit equalled 20 kg of phosphorus, one cow would produce as much manure as 6.7 pigs. And if one animal unit equalled 100 kg of nitrogen, one cow would equal 13 pigs.
In true bureaucratic fashion, the report recommends a solution sure to confuse the issue even further: form a committee.
© copyright 1999 Agricultural Publishing Company Limited.
back
Aid money next month
It will be February before Ontario pork producers see money from the estimated $1.5-billion federal-provincial income disaster program.Details of the program are slowly emerging, but federal Agriculture Minister Lyle Vanclief says "nothing is decided until it's all decided."
In a pre-Christmas conference call, Vanclief said a consensus is emerging among the federal and provincial governments on how the program should be designed. In the meantime, potential payments from the program "will certainly be helpful" in farmers' deliberations with bankers and input suppliers, said Vanclief. But he warned that government financial aid will not keep inefficient farmers in business.
"Each farmer is going to have to pitch their own private, individual circumstances to their financial institution," he said.
Vanclief did confirm that the program payouts will be based on a farmer's average gross margin for the most recent three-year period. Other details include:
* Farmers who have filed income tax returns as farmers will be eligible.
* Farmers will not need to be enrolled in NISA or crop insurance to qualify for aid.
* There will be a payment cap to individual farm operators.
* Crop insurance payments will be included in the gross revenue reference period and for 1998.
* The program will be linked to NISA, but how the process will work has yet to be finalized.
* Most information needed for application processing will be gleaned from farm income tax returns, but some supplementary information will be required.
* Provisions will be made for beginning farmers using a special calculation. The government is also exploring ways to ensure that corporate farms are weeded out of the process.Doug Hedley, Agriculture and Agri-Food Canada assistant deputy minister, policy branch, said he did not expect the program to include large corporations. "I think the cap...will eliminate the very large corporations in Canada involved in farming," he said.
How the government will distinguish between an incorporated family farm and one run by an investor-owned corporation is not clear. -
Bernard Tobin
© copyright 1999 Agricultural Publishing Company Limited.
back
Border signal stays green
Despite intense lobbying from U.S. pork producers, Washington will not slam the door on southbound Canadian pigs, says America's chief ag number cruncher.In an exclusive interview with Farm & Country PORK, Keith Collins, U.S.
Secretary of Agriculture Dan Glickman's chief economist, said "there is no talk about closing down the border...about countervailing duties or import quotas." He did not, however, rule out further food aid assistance to help U.S. producers eat into America's pork mountain.
The news came as a glimmer of hope for embattled Ontario producers, for whom a border skirmish following the Quality Packers' strike and six-digit pig runs would have been the proverbial freight train in the tunnel.
With Canadian live hog imports up 30 per cent to four million (four per cent of the U.S. slaughter), prices approaching single digits, and northern U.S. plants full of Canadian hogs, Glickman has been under intense pressure to stop the flow. In a mid-December letter to the agriculture secretary, National Pork Producers Council president Donna Reifschneider, an Illinois producer, called on Glickman to initiate a dumping investigation, encourage a U.S.-first slaughter campaign, mitigate the effect of the low Canadian dollar, and lobby Ottawa to intervene in the Quality Meats strike. Nevertheless, Collins vowed to resist "protectionist" talk, insisting that the U.S. would continue "to pursue free trade and fair trade in world markets." He did, however, urge a quick settlement to the Quality strike, which showed up in a "fairly sizable increase" in Canadian December live hog shipments south.
Collins said Glickman would rather aim to increase consumption through programs such as the US$50-million food aid assistance pork purchase, and a 50,000-tonne shipment to Russia, which Collins expected would go through by mid-January.
While pork isn't "a traditional humanitarian assistance product," the U.S. ag administration would "continue to review the prospect of using additional funds...to help the pork industry," Collins said. As well as the Canadian offensive, NPPC called for a loan guarantee program, credit forbearance by lenders, overtime and Saturday shifts at plants, a 300,000-head shipment of live gilts to Hurricane Mitch victims, and an additional 380,000-head pork shipment to Russia. Earlier, NPPC applauded Canada's admittance of live U.S. slaughter hogs from Stages 4 and 5 states free of pseudorabies.
© copyright 1999 Agricultural Publishing Company Limited.
back
EU bans Canadian-approved antibiotics
Three of four feed antibiotics banned Dec. 14 by European Union farm ministers have approvals in Canada. The Canada-approved antibiotics (with their trade names here and manufacturer) are bacitracin zinc (BMD, Alpharma) virginiamycin (Stafac, Pfizer) and tylocin phosphate (Tylan, Elanco). Spiramycin was the fourth drug nixed.European agriculture commissioner Franz Fischler called for the ban to minimize the risk of antibiotic-resistant bacteria and to preserve the efficacy of a number of antibiotics used in medicating humans, according to a report in the Dec. 21 issue of Feedstuffs.
Twelve of the EU 15 farm ministers voted for the ban, with Belgium, Portugal and Spain abstaining. July 1 is the cutoff date for use of the antibiotics in the EU. The ban will be reviewed by the end of 1999, pending further investigation, which includes results of a resistance monitoring program currently underway.
Pfizer Inc. sued the Danish government mid-December over its January 1998 ban of virginiamycin. In a BBC interview prior to the EU vote, Pfizer feed additives manager Alan Doyle said similar action might be taken against the EU, according to Feedstuffs.
OMAFRA veterinarian Tim Blackwell says the bans reflect an international movement to monitor antibiotics in livestock largely based on public misconception.
Bacterial resistance in humans, says Blackwell, simply doesn't arise from eating meat from an animal that might have been treated with a drug, but from coming in contact with a resistant bacteria. "That a child with an ear infection doesn't respond to amoxicillin is not a result of the fact that, for example, some farmers in Quebec use a little in their swine nurseries' water supplies," says Blackwell.
Human medicine, says Blackwell, creates its own resistance from improper prescription practices, over-prescribing, misdiagnoses, and failure of patients to run the prescribed course of treatment.
Nonetheless, banning antibiotics is an easy panacea for a general European population that is greener than the North American public. Adds Blackwell, "This banning issue is significant if it has a trade impact; that is, will it prevent Canadian products from entering EU markets, or will it create undue hardship for EU producers? Will those producers have to move production out of the countries affected by the ban?"
Here in Canada, he suggests, there's currently no question that the banned drugs are effective in swine, or that they have no potential to create resistance in humans. - Richard Charteris
© copyright 1999Agricultural Publishing Company Limited.
back