U.S. Federal Funding Stalemate Creates Concerns for North American Pork Producers

Farmscape for October 4, 2013

A business development specialist pork with Alberta Agriculture and Rural Development suggests the North American pork industry will have to return to one on one negotiation of live hog prices if the U.S. federal funding stalemate continues.
As a result of the U.S. federal funding stalemate in Congress non-essential U.S. government services including services offered by the U.S. Department of Agriculture have been suspended.
Ron Gietz, a business development specialist pork with Alberta Agriculture and Rural Development, says with the suspension of mandatory price reporting there is no CME lean hog index so the futures market will have to look at settlement options if the situation persists.

Clip-Ron Gietz-Alberta Agriculture and Rural Development:
The first thing is slaughter inspection and those kind of activities are deemed essential so that's still going on.
We're still killing and processing the animals and they're getting graded and their health is assessed and so on so that part is fine.
As we move into other areas though it quickly becomes an impact so mandatory prices reporting, that has been suspended as of Tuesday of this week so as a result of that we basically have no price reporting out of the major U.S. markets and that's for hogs as well as for the pork and all of the products.
There is a lot of pressure to get a resolution by October 17, I believe is the date, because of the debt ceiling in the U.S. so there will be a lot pressure to get that resolved by the end of next week.

Gietz notes every hog in Canada is priced off a formula based on the U.S. price so this will definitely impact pricing in Canada.
He says assuming the stalemate continues we'll have to go back to the old system of one on one negotiation of price between the buyer and seller but for as long as possible he expects stakeholders to stick with the current prevailing price and hope for a timely resolution.
For Farmscape.Ca, I'm Bruce Cochrane.

       *Farmscape is a presentation of Sask Pork and Manitoba Pork Council