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Hog supply lags demand

Brandon plant forced to close a day a month

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Workers will take unpaid leave during monthly non-production days this summer at Brandon's Maple Leaf Foods plant.

BRUCE BUMSTEAD/BRANDON SUN Enlarge Image

Workers will take unpaid leave during monthly non-production days this summer at Brandon's Maple Leaf Foods plant.

The pendulum is swinging back up when it comes to hog prices.

But so many Manitoba producers have been culled by low prices, high costs and increasingly restrictive environmental regulations, processing plants are having trouble finding enough supply.

Maple Leaf Foods' large pork-processing plant in Brandon has been forced to have one non-production day a month for the next couple of months, a day of unpaid leave for the workers. The Brandon Sun reported 1,800 of the plant's 2,200 employees will be affected.

Maple Leaf spokesman David Bauer said the "brown-out" will facilitate upgrades to the plant.

The company might not have had a non-production day if it got enough hogs.

"It (the non-production day) will help us better align production with our current supply," Bauer said. "As you know, hog supply across North America remains restricted. It's an industry challenge, and it isn't something that Maple Leaf is facing alone."

It's not clear whether the supply challenges will also affect workers at Maple Leaf's ham plant in Winnipeg.

The hog industry has been riding a roller-coaster in the past couple of years.

The continued effects of the U.S. drought in 2012 that drove up feed costs and the deadly effects of the porcine epidemic diarrhea (PED) virus on hog supply in the U.S. is limiting hog production in Manitoba.

Karl Kynoch, chairman of the Manitoba Pork Council, said there are about one million fewer hogs being produced in Manitoba now than four years ago.

A provincial moratorium on new hog-barn development is not helping.

Kynoch said Manitoba environmental regulations regarding manure management are inappropriate and too costly.

He said those regulations are producing an artificial restriction on new investment at a time when there is capital available. Hog producers are making good money, with prices almost double those of two years ago and grain prices more stable.

"It has been a very frustrating exercise. We developed programs which are market-driven, would bring in millions of dollars of new investment and create thousands of new jobs," Kynoch said.

Brandon Mayor Shari Decter Hirst said she does not believe the provincial government appreciates the urgency of the situation.

"The environmental concerns have to be looked at, but there is a long way between some and none," she said. "If we are serious about making it a viable business for Manitoba, then we have to start moving our feet. It won't get better on its own. It will only get worse."

Manitoba's agriculture minister vows the government is vigilant about addressing the hog shortage.

Ron Kostyshyn said the province continues to work with the hog industry on producing more hogs while maintaining environmental standards.

"The manure-treatment options are somewhat limited," Kostyshyn said. "I know that we're always trying to work with industry, work with science, work with the universities... how do we minimize phosphorus leaching into tributaries?"

Kostyshyn said his staff are doing "whatever they can" to work with the producers on finding the most economical means to address environmental concerns.

— with files from the Brandon Sun


martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition May 28, 2014 B6

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