“Festive” may be too strong a word to describe the mood at the 2012 Alberta Pork Congress. But the atmosphere at this year’s industry trade show in Red Deer is certainly more upbeat than it was in 2011.
“For sure it’s better,” said Alberta Pork chairman Jim Haggins. “We’ve had a better fall and winter pricing-wise than we’ve seen in quite some time.
“There’s some cautious optimism right now.”
The Canadian pork industry was hurt by an extended period of low prices that forced many producers out of business. Last May, Alberta Pork even refunded 85 per cent of its 2010-11 producer levies — $2.1 million — to help members get over the financial hump.
Since then, prices have improved to the point that most operations are no longer bleeding red ink. And there are new risk management tools — most notably the hog price insurance program and forward pricing program — that are now available to producers.
“That’s a real positive thing that’s new this year compared to last,” said Haggins.
However, the industry remains fragile.
“It’s going to take quite some time to pay off the debt that’s been accumulated the last 3 1/2 years or so,” he said.
Before Alberta’s depleted supply of hogs can be replenished, producers will have to commit to the industry and lenders will need to overcome their nervousness about the sector.
“If we can rebuild the confidence of people and get some better access to capital for those who want it, I think we could turn the corner here given another year or so,” said Haggins.
Challenges remain, he acknowledged.
The cost of inputs like feed and even electricity are rising, and labour remains a concern — both in terms of the availability of workers and the high wages that must be paid, especially in Alberta.
Meanwhile, the decline in hog numbers makes it difficult for processing plants like Olymel in Red Deer to operate efficiently.
“We don’t have enough pigs for packers in Western Canada,” said Haggins, noting that this scarcity has allowed producers to negotiate a premium for their animals.
“But long term it’s not good. We need to have our processors operating efficiently so they can pass on some of that money to our producers and have them expand.”
The key to the long-term viability of the Canadian pork industry is exports, especially to Asian countries, said Haggins. Not only is pork a preferred source of protein for people there, they consume parts of the carcass that North Americans don’t.
“Those markets are a real bonus to our exporters,” he said, stressing the importance of the federal government continuing to pursue trade agreements with those countries.
The 2012 Alberta Pork Congress started Wednesday and continues today at Westerner Park.
Yesterday evening, the 2012 Quality Awards were presented, with Britestone Colony named Grand Champion, Blue Sky Colony claiming the High Health Award, Pine Hill Colony receiving the Food Safety Award, Holt Colony winning the Core Lean Award and Athabasca Colony taking home the Core Weight Award.
hrichards@www.reddeeradvocate.com