Feature: Quebec still wants your hogs!

Thursday, June 10, 2010

Inventories in Quebec have declined less than in the rest of the country and slaughter capacity is available to take Ontario hogs. But, as of 2011, they will no longer be insurable under ASRA

by SUZANNE DEUTSCH

The drop in inventory in Quebec hogs means there is plenty of room there for Ontario hogs, according to Bernard Verret, general manager of the Quebec Federation of Pork Producers (QFPP).

Under the marketing agreement reached last year between Quebec's pork producers, processors and government, each abattoir has been assigned a number of producers, but they are free to buy from Ontario producers and would gladly do so in order to meet their slaughtering capacity. Transactions are not controlled by the federation, insists Verret.

Minor adjustments are being made to the four-year agreement, but parties are generally pleased. "It's not a perfect agreement, but there is an on-going dialogue and willingness to find solutions to make the sector viable," adds Verret.

Animal shipments should be timed so that they arrive at slaughter facilities with empty stomachs but within about 20 hours of their last meal. The only way this can be accomplished is if producers and processors work together to co-ordinate movement.

Fewer animals arriving at slaughter facilities with full stomachs is a good indicator the system is working, according to Verret.

Verret was a speaker at the Growing Forward conference staged by the Centre de référence en agriculture et agroalimentaire (CRAAQ) in St-Hyacinthe on April 27. He said Quebec's hog inventories have declined by only 11.2 per cent in the past five years, while inventories for the rest of the country plunged by 21.5 per cent.

However. the social, environmental and economic challenges have taken a toll on producers and Verret explained that, while Quebec hog producers may seem better off than their counterparts in other provinces, they are carrying an excessive debt load.

QFPP numbers indicate that Quebec hog producers carry an average debt load of 46 per cent. The figure for Ontario producers is about 44 per cent, for Americans only 17 per cent.

In addition, ASRA represents a very high collective debt of $750 million dollars which they must repay within the next five years and which will greatly slow down their economic recovery. "In my opinion, few producers took the federal buyout in Quebec simply because the $400 to $1,000 payout per sow was way out of line with the amount of debt they have, and didn't take into account the repayments that need to be made into Quebec's insurance program (ASRA)," says Verret.

According to the QFPP, the 800,000 Ontario-born piglets finished in Quebec every year will no longer be insurable under ASRA as of January 2011. The belt-tightening measure is one of many taken by La Financière agricole, the agency responsible for Quebec agricultural support programs, in order to recoup losses of $750 million in the next five years.

Verret says the QFPP isn't pleased by the measure and hopes it won't have a big impact on sales. The market is showing signs of recovery and producers might prefer to buy their piglets from Ontario and opt out of the insurance program that costs close to $12 per animal. BP

SIDEBAR: New ASRA program guidelines

Under the new guidelines, the number of insurable units is capped at 7,600,000 hogs and 370,000 sows. Insurance payouts will be based on 75 per cent of the most efficient farms and total compensations per year will be limited.

The ASRA reform targets larger operations which produce more than three times the "model" farm of 228 sows. Under the new guidelines, coverage for excess units will be on a 50/50 basis instead of the 1/3 producer and 2/3 government split. BP