Farmscape for July 28, 2011
The closure of the Cloverdale Foods Minot pork packing plant is expected to have a minimal impact on prices paid for western live hogs.
Earlier this week Cloverdale Foods announced, as part of an enhanced business model that no longer includes owning hog processing operations, it has closed its Minot pork packing plant.
Prior to the closure h@ms Marketing Services had supplied the facility between 600 and 800 hogs per week, about 60 percent of the plant's volume.
H@ms Marketing Services general manager Perry Mohr acknowledges any time producers lose a market it can have price implications.
Clip-Perry Mohr-h@ms Marketing Services:
There's probably shackles in western Canada to absorb that volume without any negative price implications.
Having said that, long term it still is nice to have options for producers and additional hogs that come along from time to time.
Again, because of the volume that we're talking about, I don't envision that it will have at least in the short term negative implications on price.
Where I can see for the Canadian producers in particular it having some kind of negative implications, If we have to ship hogs to the United States and we can't get the same pricing that we were getting from Cloverdale it could have.
Because they were paying the same price as hogs that were born and raised in the U.S. there was no price discount.
Conversely if we have to ship those hogs to a John Morrell or a Swift or a Hormel, well first of all they're not buying any so we've got to ship the hogs further into the U.S. to packers that are buying hogs of Canadian origin so there would be negative implications price-wise and there would be additional freight involved with getting those hogs into those markets because they're further away.
Mohr says finding a home for hogs displaced by the closure is still a work in progress.
He notes the Minot plant had been closed for about a month prior to the announcement due to flooding of the Mouse River so those hogs have been going to packers in western Canada.
For Farmscape.Ca, I'm Bruce Cochrane.
*Farmscape is a presentation of Sask Pork and Manitoba Pork Council