Washington - National Pork Producers Council President Donna Reifschneider said today that Canadian officials have agreed to consider taking significant action to ease the U.S. packer bottleneck that has sent prices for live hogs to their lowest levels in history.
Reifschneider, along with NPPC CEO Al Tank and NPPC Trade Counsel Nick Giordano, held meetings in Toronto and Ottawa on Wednesday with Canadian pork and meat officials to drive home the point that the hog crisis was a North American problem and that a greater sense of urgency in Canada was necessary in order to find solutions that would benefit hog producers in both countries. Reifschneider, of Smithton, Ill., termed the discussions “very frank,” saying Canadian officials were told that the negative consequences of their continued inaction would be difficult to predict or control.
“On Dec. 7, when workers walked off the job at the Quality Meats plant in Ontario, U.S. hog prices were at about $20 per hundredweight and were heading upward,” Reifschneider said. “By Dec. 14, prices fell below $10 for the first time since 1955. The reason is clear. More hogs from Canada were coming to U.S. plants that were already stretched to their limit.”
There has been an estimated 37 percent increase in the number of hogs exported from Canada to the U.S. for slaughter in 1998, a total of 3.2 million.
In his testimony Tuesday, Jan. 5, before a group of Democratic Senators probing low livestock prices, Iowa State University Economist John Lawrence testified that once packer capacity has been reached, each additional 100,000 hogs drives the price down by at least $9 per hundredweight. Packer capacity in the United States was reached after Labor Day.
Reifschneider said Canadian officials agreed to examine a plan supported by USDA whereby hogs from certain northern states will be sent to plants in Western Canada where additional capacity exists. She added that under the plan, U.S. and Canadian government officials would devise a way to overcome the current exchange rate differential.
Also on Jan. 5, four pork producers accompanied four U.S. Senators to a meeting at the White House and had an opportunity to speak directly to President Clinton about possible solutions to the low price problem.
Jill Appell of Illinois, Bryan Jorgensen of South Dakota, Craig Christensen of Iowa and Phil Hardenburger of Nebraska, along with Sens. Bob Kerrey (D-NE), Tom Daschle (D-SD), Tim Johnson (D-SD) and Kent Conrad (D-ND), met with Clinton for about 20 minutes on Tuesday morning.
The producers discussed the need for quick action on proposals like an immediate cash infusion, additional funding for the Farm Service Agency loan guarantee program and other measures to help pork producers survive the current crisis.
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