After experiencing some profitability over the summer months, hog producers are once again in the red.

Pork prices dropped by around 30 dollars per hundred weight over ten days in late September and early October. Meanwhile, feed prices have risen substantially this fall with rationing of tight U.S. corn and soybean supplies.

"The breakeven price right now is around 150 dollars a pig for most producers. I was talking to some producers the other night who had received 101 dollars for their last shipment. 101 to 120 dollars is kind of the area that producers are receiving right now," says Karl Kynoch, chair of the Manitoba Pork Council. "That's a lot of loss. It's amazing that we're producing a product that the world needs, and yet a farmer can't get enough for the product to meet his basic costs."

Kynoch says producers are tired of paying to provide the public with pork. He draws this comparison:

"If you were going to work for your employer and you paid him to come to work everyday and paid for your gas and meals and everything out of your own pocket, it wouldn't be very long and you wouldn't be able to pay for your house either."

"Producers can't handle too much more of this going forward. There's a huge amount of debt-load and producers want to pay that off. Producers are very proud at they want to meet their commitments but at the end of the day, when you have this kind of loss, it's hard to meet your debt commitments," says Kynoch.

He says more producers will likely go out of business over the winter.

"Right now the profit margins don't look to be there until at least May of next spring. Hopefully something will happen around the world that will take pork prices up before that," he says.

"It's going to be a very tough group of producers left by the time they get through this."

~ Tuesday, November 30, 2010 ~