Alberta hog producers urge pricing changes, say they're losing $40 US per animal

Alberta pork producers say they're in crisis — and that this is a make-or-break year for them.

Producers say drastic price drops have some closing their doors and others on the verge.

John Middel, owner of Pork Point Farms in Rocky Mountain House, is worried. He says if things don't turn around in the next month, he may have to close his barn doors.

"Short term, it's a very trying time," he said. "Long term, if there's not some indication that pricing models are going to change here in Western Canada, independent producers will not and cannot stay in business."

According to Middel, Alberta's pork producers are the lowest paid in North America.

"Our price is based off the U.S. The U.S. has a poor price, but we have a negative basis, so instead of just a poor price, we've got a terrible price," he said.

Right now, Middel says he's getting roughly $116 for a 275-pound hog — and it costs well over that just to feed one up until sale time.

"We need to push to get a fair portion of the final price that consumers are paying," he said. "We need to ask the companies that buy our pig, why is it that they're only paying $116 for a pig?"

Brent Bushell, general manager of Western Hog Exchange Inc., the group that represents pork producers, says that while retailers prosper, producers are losing $41 US per animal.

"This is probably the worst price points we've seen in 20 years," he said.

"This time of year last year, we had guys making $78 a hog, whereas today they're losing about $41 a hog. So that's quite a big spectrum of change from one year to a next."

Bushell says the Western Hog Exchange sees the need for change.

"We need to eliminate the existing pricing system, we need to start working with our Canadian processors and producers and say, 'how are we going to build the industry? Do we want to build the industry?'" he said.

"If we do, how do we take a fair equitable value out of the value of the pig so that everyone shares in that value?"

If this continues, producers are anticipating losing up to $500,000 in the next six months. Bushell says.

In the interim, Bushell says producers are already shutting down their operations.

"Ten years ago in Alberta we had probably 2,000 commercial hog producers, and today we're probably just over 200," he said.

"We're actually seeing a lot of our Hutterite Colonies make the decision to shut down their barns. It doesn't make sense for them to continue, knowing over the next six months they'll lose $50 a hog."

The Western Hog Exchange says it's in talks with industry players about developing a fairer model, where everyone involved benefits.

The provincial government says there are business risk management programs that farmers can sign up for — some of which compensate farmers when margins drop below a five-year average. 

But, it's unclear how many hog farmers are in these programs.

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