Alberta Pork AGM

Leaders at Alberta Pork look to the coming year with a grim sense of optimism, bearing a promise to its members and always mindful that the road ahead is fraught with peril.
"Our new mission is to serve and represent pork producers to enhance prosperity within their communities," chairman Jim Haggins said in his opening remarks to the producer corporation's 2011 annual general meeting, held last Dec. 8 in Leduc.
"Each and every one of us, as producers, plays a part of our local community as well as our industry partners who support us in those communities. With a strong industry, we will have, automatically, stronger communities," said Haggins.
Alberta Pork has identified a number of challenges going into 2011, he said. Short-term challenges include effects of bio-fuels production on feed costs, sharp increases in the cost of electrical power and worries about water licensing – especially in Southern Alberta.
Additional challenges include the lack of access to capital, spending cutbacks from both the federal and provincial governments, increasing resistance on the part of government to ad hoc programs and a trend for producers to find themselves funding programs that had previously been offered by government, including the Canadian Swine Health Board, risk management strategies and swine research programs, said Haggins.
The industry continues to shrink while an increasing number of pigs are being shipped to the United States for finishing, Alberta packers are losing volumes and therefore becoming less efficient and operation of government regulatory agencies including the Canadian Food Inspection Agency and Alberta's Natural Resources Conservation Board need to be made less costly.
The previous months had been a period of profit at varying levels for those producers who remain operating in Alberta, estimated at between 370 and 380 during December, said Haggins.
"We need to get through the winter without major losses and we hope that will continue and our revenues will hang together until we get to a strong market in spring," he said.
Coupled with a lack of capital has been a lack of desire to invest in the industry in recent years.
"We don't see how that's going to take off any time soon. Without that, we could have a succession challenge. Who is going to take over our existing units? Who are going to be the new owners and managers of our industry going forward in the longer term?" said Haggins.
Research in feed grains is needed quickly to help lower feed costs and production efficiencies have to be protected, he said.
Haggins said he does see a light at the end of the tunnel, with a growing demand for pork that he hopes will translate into additional revenue for producers.
Executive director Darcy Fitzgerald outlined the updated strategic plan, stating that it was developed over the previous six months with a commitment to prosperity for the producers the corporation represents.
"Alberta Pork is your company. It has to be accountable and transparent," said Fitzgerald.
Its three objectives include creation of an environment of profitability for producers, development of the most informed and engaged industry and building strong relationships with industry partners.
Within that context, Alberta Pork has learned to run lean while focusing its resources on actions that give producers the most value possible for their investment in the corporation, said Fitzgerald.
"Access to capital is a big issue. It is one that we will put a lot more effort into," he said.
"There is a lot of detail. There are a lot of goals. We need to get some of these things done. We can't just talk about them. The big thing is, the board has focused in on a number of key issues, and that's where we need to spend our time,"
Included in the work is a pilot project on costs of production, geared to helping producers reduce costs and enhance the organization both domestically and internationally, being steered by contract employee Murray Roeske.
Merchandising specialist Steve Dziver of Winnipeg took producers through his evaluation of North American pricing trends and what they mean for Alberta producers.
"Canadian price changes have been noticeable since mid-2010, starting in the east and working their way west," said Dziver.
"Ontario is the first market that I recognized was changing. Look at the hog farm transition program. There was a lot of smaller farrow-to-finish herds taken out in Ontario and, although was an equal if not greater amount in the west, the impact was immediate."
Ontario's two packers ended up competing for the remaining hogs, while the export market of live hogs dried up.
"Now, we have this battle to keep these plants going," said Dziver.
"It became a bit of a seller's market again. The buyers and packers . . . were actually going out there to keep people from leaving or exiting the industry."
The wave moved west with the return of live exports becoming a big concern to the extent that Manitoba packers have been put back into a position of having to compete for hogs, he said.
"Competitiveness has returned to the Canadian marketplace due to liquidation, and that is a good thing for us," said Dziver.
"However, the day of the one size fits all is over. You will not see one blanket price to supply the pigs that are needed to keep our plants full," he said.
"Packers, for the first time in awhile, are facing the challenge of selling themselves to producers. This wasn't the case for years. So now, packers actually need to compete for hogs with innovative pricing or risk the threat of production passing them by. As a province, as an individual, you need to . . . accept the fact that there is a drive, there is a need for your hogs."
Alberta Agriculture and Rural Development Minister Evan Berger, who ranches in Southern Alberta, said in his address to producers that he had met with Haggins and Fitzgerald shortly after his appointment in September to discuss challenges facing swine producers and their industry.
"I am committed to helping you with these challenges. If we face these challenges together, we will get through them," said Berger.
Common issues facing all agricultural producers in Alberta include weather, market access, labour, reduced profitability and higher input costs.
"We're working hard to boost the industry through a variety of means," he said.
Specifically, Alberta government officials are working to push Alberta products into international markets, including representations before Christmas to South Korea, which has since dropped the tariffs that had effectively closed its borders to Canadian Beef since the BSE outbreak in 2003.
The provincial and federal governments are committed to enhancing markets around the globe, and especially in the European Union, said Berger.
"Things are looking much better than they were, but we're not out of the woods yet. The pork industry . . . is making the right moves," he said.
He offered his commitment to returning agriculture to its rightful place as the second most important industry in Alberta, behind oil and gas. •
— By Brenda Kossowan

cutlines:
Steve Dziver from Winnipeg addresses attendees at the Alberta Pork AGM in December.
Alberta Agriculture and Rural Development Minister Evan Berger