Behind the Lines - August 2009

Tuesday, August 4, 2009

"The hits just keep on coming" isn't just a line from a top 40 radio station disc jockey. It's a fact of life for pork producers in Ontario and elsewhere in Canada as H1N1, misnamed as "swine flu," strikes yet another body blow to an industry dazed and stumbling after battles with prices ravaged by shifts in the Canadian dollar exchange rate, circovirus and PRRS, skyrocketing feed prices and country-of-origin labelling in the United States.

We don't have to tell you that prices went backwards this spring when the H1N1 crisis hit and some trading nations closed their borders to North American pork. Producers don't have a lot of options.

One of the few glimmers of light is advances into European markets gained by Quebec packer Les Viandes du Breton Inc, which buys hogs out of Ontario for its Humane Pork program. Our story detailing their progress starts on page 15.

Not so positive is the losing battle the pork industry is fighting with the media over the popular misnaming of the H1N1 virus, which kills some of its human victims and has been named a moderate risk of pandemic world-wide. We write about the Canadian Broadcasting Corporation's doubletalk on this issue in our "Beyond the Barn" feature.

And columnist Larry Martin, a former University of Guelph agricultural economics professor, puts a dollar value to the damage. His "Second Look" column can be found on page 46.

Pork producers are looking at a lot of different options as they try to survive this series of crises. One of them is shrinking production to meet demand. Ridgetown-based agricultural economist Ken McEwan says it's important to keep the numbers in perspective. Ontario is close to having production of pigs in line with slaughter capacity, but is still a long way away from being in line with consumption.

Last year, Ontario imported 128,000 tonnes of pork, and exported 149,000 tonnes.

Producers shipped 806,000 feeder pigs and 892,000 market hogs. Critical mass, economies of scale and technology transfer all come into play when pork production falls to domestic consumption levels only.

"There are many implications," McEwan says. To withdraw that much from the pork industry "has ripple effects through rural Ontario." Still, he adds, "our strength is our domestic marketplace. Assuming our costs and efficiencies are similar to other regions we should be able to be there" in a competitive position when things turn around – if anyone is left.

ROBERT IRWIN