Behind the Lines - August 2008

Friday, August 8, 2008

Who pays for trucking, when and how, all become critical questions when the provincial marketing board decouples from the settlement process. This month's cover story examines this subject, looking into a proposal known as freight on board (FOB) plant pricing. It is one of the relatively arcane, yet critical, changes proposed as the provincial marketing board moves to give producers what they have asked for – more freedom in marketing their hogs. This story starts on page 6.

Ontario's pork producers have a long history of looking for scapegoats when they are dissatisfied with returns for hogs. Ontario Pork's plan to develop a new "strategic direction," as it is called, has been in the works for a while. Decisions are going to be made in a year, and the deliberations predecessing these come at a time when production costs are soaring to unprecedented heights and pork prices threaten to dive to levels not seen in a decade. At the same time, the Farm Products Marketing Commission, the board's overseer, is shining a spotlight on the marketing board's operations, again, at the request of dissatisfied producers.

A new marketing plan is not going to solve the problems of high grain costs, disease and currency fluctuations. These are all outside the realm of Ontario Pork. Where Ontario Pork can have a role, though, is in assuring timely and accurate payment, more choice in marketing and more freedom in business arrangements.

It's tough to do both at once, Ontario Pork chair Curtiss Littlejohn admits. The commission sets the rules and has the power to send the pork board in a direction different than the board may have intended. Through all of this, producers are scratching to survive in the business or make the most of opportunities to get out.

The board's monopoly on selling may very well be opened up. Farmers may become their own selling agents, and perhaps, later, the most successful will become agents for other farmers as well.

Would another way of marketing hogs put more money in Ontario producers' pockets? Will costs be reduced? Perhaps, or perhaps not. Whether the marketing issues at Ontario Pork can be separated cleanly, or cause an unravelling of services to producers and their customers, remains to be seen.

ROBERT IRWIN