Spencer Long, Genesus Director of Marketing
The summer months continue to not bring much positivity to the Canadian pork industry. Prices remain annoyingly low; large quantities of hogs continue flowing south of the border to be harvested. Between January and April of this year, exports to the U.S. were up 149,000 head compared to the same period last year. The bright side (depending on what side of the table you’re on) is that feed prices have been lower. Feed costs as a percentage of revenue are now closer to the historical norm. At their highest in the post-COVID era, feed costs represented over two-thirds of the cost of production for the average Canadian hog producer. At their highest, they also equaled 76% in Western Canada and over 80% in Eastern Canada of pork producers’ average revenue. Feed costs today are now at 63% in Western Canada and 65% in Eastern Canada of pork producers’ average revenue, right where they were in 2020. Although it is not a fun time right now, the future looks to be better. We need to hope it will be.
The USDA projects that pork consumption will reach an all-time high in Canada this year. This is positive news that needs to be leveraged into consumers continually purchasing pork not just as a substitute for beef because of its high price, but instead, pork that consistently delivers a good eating experience. We know what needs to be done as an industry, we just need the wherewithal to get it done. It is insane as an industry to put so much focus on the minutia that so few consumers care about vs. the things they actually care about and, as an industry, for too long, we have totally neglected that. When every single consumer study tells us that “Taste” is the number one factor in consumers’ decision about purchasing a product or not, it seems sensible as an industry to be focusing on this rather than what BlackRock (major shareholder) in Midtown Manhattan is telling the world’s largest genetic company to do. As an industry, it is great to know that BlackRock and Vanguard have so much influence over the world’s largest genetic company, they might even be able to point out Iowa on a map, so they obviously know what’s best for our industry.
The rail disruption of CN and CPKC, two of the largest rail companies in Canada, going on strike and then ordered back to work by the federal government, could have had massive ramifications on Canada’s ability to move grain. Both companies’ combined move $1 billion CAD worth of products every day. For farmers across Canada, the strike could have wreaked havoc. To get the best price, grain shipping companies try to move as much grain as possible before the Australian harvest comes off in January and February, when global prices tend to drop. If that window is shortened, it would have meant farmers would get paid less for their grain. The impact of that strike would also have had ramifications on processing plants that were anticipating weekly losses of up to $3 million CAD. The initial impact would have been a delay in customer deliveries, followed by a plant shutdown within 7 to 10 days of strike action. Once the rail resumed, it would take 2–5 weeks for plants to ramp back up to normal capacity. The impact of that disruption cannot be overstated, it would have far-reaching impacts on producers and Canada economically. Hopefully, it has been resolved and the chaos that a full-blown work stoppage doesn’t come to fruition.
