Need for Made in Canada Hog Pricing Increases

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Farmscape for December 4, 2020

Steve Dziver Presentation 1:00:54 Listen

The President of SAMC Farm Management Professionals says it will be a challenge but he is confident a “Made in Canada” hog pricing formula will ultimately be adopted. Currently the majority of hogs purchased by Canadian processors are priced according to formulas based on U.S. prices. “The Western Canadian Hog Price Formula” was among the topics discussed yesterday as part of the final virtual session of Saskatchewan Pork Industry Symposium 2020. Steve Dziver, the President of SAMC Farm Management Professionals, says the first step toward a made in Canada price will be to get a commitment from at least one Canadian packer.

Clip-Steve Dziver-SAMC Farm Management Professionals:
The “Made in Canada Pricing” is something that I believe will happen in my lifetime. We won’t buy or sell all of our pigs on it.
Something that I believe should start is an initiative to have five percent of the pigs bought and sold in Canada on some other method and maybe that’s five percent of each packer or maybe that’s on processor doing more than the other. By doing zero, and I shouldn’t say that.

Some of the processors that are producer owned in this country are kind of doing that already if we think about it.
You’re basing it off of meat sales and you’re coming back to operating margins and processing margins so I shouldn’t say there’s no examples of it. But I think that the industry should work toward it. There have been some initiatives that have been started already.

If there was a need for it, now is as big of a need as any in the threat that we have around the world. I’ve spent, and I’m, not exaggerating, I’ve probably spent five years on a model that is near completion to have some information on Canadian pricing but it’s a difficult challenge.

Dziver acknowledges accomplishing Made in Canada Pricing will not be an easy feat. He says we do have Canadian data on volume and price but we would need a commitment from at least one Canadian packer.

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