CANADA-PIG FARMERS NOT HAPPY.
Protectionism in the U. S. is hitting hog producers in Chatham-Kent at the worst possible time.
Not only are local hog producers losing money on every animal they sell, but opportunities to market those hogs to the U. S. are becoming more difficult to achieve.
Country of Origin Labeling (COOL) -- a provision of the 2008 U. S. Farm Bill that demands that hogs (and other livestock, such as cattle) that aren’t born, raised or slaughtered in the U. S. be identified for the benefit of American consumers -- is making it increasingly difficult for local producers to market their animals south of the border.
Some U. S. slaughterers find the red tape so frustrating that they’re just not accepting Ontario hogs, while others are waiting for the fine print in the COOL legislation to be determined before they make any move.
Producers who attended the Southwestern Ontario Pork Conference this week at the Ridgetown campus of the University of Guelph, were told that interim regulations have been in place since last September.
That lack of decision and finality is causing some American packers to turn their back on Canadian hogs, said Patrick O’Neil, sales team manager for Guelph-based Ontario Pork, the province’s marketing board for hogs.
"Some of the processors are saying it’s just easier to accept U. S. pigs. They say they’re going to wait until the COOL rules are solid," O’Neil admitted.
"The net result is that I’m now dealing with only four to five plants in the U. S., whereas I used to deal with about a dozen."
In the fourth quarter of 2008, 22,000 fewer Canadian hogs were being shipped every week.
"It’s the same impact as if one of the packing plants closed," O’Neil said..
He said the impact is greatest in Western Canada, but is still being felt by Ontario producers.
Among those feeling the pinch are Steve and Alice Uher of Blenheim, who have been raising hogs for 24 years. Up until recently, the Uhers shipped their animals to an Ohio packer, but have found the COOL legislation to be an obstacle.
They agree that the legislation is just one more problem for the hog industry, which they say has been in crisis for several years.
"I hate to use that cliché, the perfect storm, but that’s what this industry has been facing, especially in 2008," said Steve Uher.
"We’ve had to deal with a more expensive Canadian dollar, the financial crisis with banks, and now this COOL legislation. It’s just one more thing to deal with."
Uher said producers have faced financial difficulties for the past five years, but the crisis has become more pronounced in the last three. The cost of producing a pig still outstrips the price the Uhers are receiving for their hogs.
"If you’re shipping hogs this week, you’re losing $30 a hog," he said.
Uher says most have been using their business equity to keep going, adding that anyone who could have left the industry with the least amount of financial distress made that decision years ago.
He also points out that producers have also taken advantage of payments from the federal CAIS program.
"If not for that, there’d be a lot of bankruptcies."
The overall result is an industry that’s shrinking rather than growing.
At one time, Chatham-Kent was ranked as Ontario’s seventh biggest hog producer, generating about $55 million in annual revenue. Uher doubts whether those numbers would stand up today.
And he fears for the industry’s future, because few young people are entering the sector.
Alice Uher, who is also president of the Kent Federation of Agriculture, agrees and notes that the COOL legislation is an immense obstacle for Chatham-Kent’s hog producers because of the region’s proximity to Michigan and Ohio.
