January 30, 2017 7:56 pm Published by Leave your thoughts




Canada Market Report – Labour (Challenge) of Love

Bob Fraser – Sales & Service, Genesus Ontario

bfraser@genesus.com

All pork producers I deal with and talk to have operations that are certainly a “labour of love”. To raise their stock in a humane, sustainable, and hopefully profitable manner, to raise their families, and to build something to extend to the next generation. It certainly needs to be a labour of love, as this often can be a hard game. And it seems that one of the top things making it harder is in fact labour. 99% of the conversations that I have with producers sooner or later turn to labour. They reference the challenges of finding, training and retaining good help. You often start with some of the usual complaints of “no one wanting to work” to “not working as hard as them”. However, many producers are starting to realize that the well of “farm kids” that the industry has so long drawn on has dried up. South Western Ontario, where 95% plus of the hogs are in the province, also has the largest urban area in Canada, with all the employers to compete against for labour. These include many high paying ones in automotive, manufacturing and high tech. The “farm kids” are being drawn to these options as well.

This recently released study by the Canadian Agricultural Human Resource Council highlights some of the extent of this problem.

Labour Shortages Holding Back Pork Producers

 Labour shortages are already keeping Canadian pork producers from expanding, and the problem is expected to get even worse between now and 2025, according to new research.

 A three-year study conducted by the Canadian Agricultural Human Resource Council (CAHRC) found the widening labour gap is threatening to limit the profitability and growth of Canada’s red-meat industry. Indeed, 17% of pork producers reported delaying expansion plans due to an insufficient workforce, the survey said.

 The study revealed that in 2014, the pork industry, which employed 14,000 people that year, was unable to fill 800 jobs. By 2025, the pork industry along with the beef industry is expected to see the labour gap widen significantly, with as many as 15,500 more jobs than the domestic workforce can fill.

 In fact, nearly one in five jobs in the pork industry are also expected to be at risk if additional sources of labour can’t be found.

 “Renewed global markets and a growing demand for animal protein in emerging markets are driving a higher demand for Canadian beef and pork,” the study said. “At the same time, Canada faces a shrinking pool of domestic agricultural workers.”

 The most significant factor in the growing labour shortage is the retirement of the pork industry’s older-than-average workforces. Over the next 10 years, nearly one in four Canadian pork workers are expected to retire.

 Source: Syngenta & DePutter Publishing Ltd.

 I expect as outlined in this study that labour could become the number one factor limiting the growth of the Ontario and Canada pork industry. This has caused many producers to turn to foreign worker programs as a source of labour. However, that requires a whole new skill set that may include bridging language and culture. This also requires assistance from the government and there is debate in this country as to whether this is being made harder than easier.

However, as with most things, producers need to help themselves in this area by looking for ways to make their business more attractive to potential employees. As one colleague suggests, it starts with the barn entrance. He proposes to the producer (this industry is still male dominated) that he have his wife use the shower into the barn. If the producer appears horrified at that being a good idea, here in lies the start of the problem.  Producers need to understand that employees are unlikely to accept conditions or “work as hard” as an owner with “skin in the game”. Seems that the successful producer employers are finding how to make their industry look as interesting and attractive to potential employees as any other industry. They also appear to be figuring out often how to do this with employees that may know little to nothing about pork production or agriculture in general. Challenging indeed!

Below Compiled by the OMAFRA Swine Team OMAFRA.Livestock@ontario.ca is how things have been running for the last five weeks. A nice recovery from the fourth quarter and looking like better days ahead.

The Ontario Market

23-Dec-16

30-Dec-16

06-Jan-17

13-Jan-17

20-Jan-17

100% Formula Price ($/ckg, 100 index)

$141.01

$141.20

$138.10

$145.90

$157.74

Previous Year – 100% Formula Price ($/ckg, 100 index)

$135.51

$132.30

$135.20

$141.87

$148.14

Average price ($/ckg, DW total value)

$165.34

$171.61

$174.54

$172.57

 

Low price ($/ckg, DW total value)

$145.20

$147.44

$146.58

$148.17

 

High price ($/ckg, DW total value)

$211.53

$218.03

$225.44

$218.53

 

Weekly Average Dressed Weight (kg)

100.07

102.45

104.37

103.22

 

Market Hogs Sold

82,698

55,751

94,574

108,516

 

Market Hogs Sold – % of Previous Year

168%

86%

86%

103%

 

Weaned Pig Value (C$/pig) – 26% of Base Formula Price

$36.66

$36.71

$35.91

$37.93

$41.01

Feeder Pig Value (C$/pig) –  41.25% of Base Formula Price

$58.17

$58.25

$56.97

$60.18

$65.07

Market Pig Value (C$/pig) –  101% of Base Formula Price

$158.77

$162.72

$162.13

$169.31

$177.25

25 Kg. Feeder Pig Value 16 Weeks Prior (C$/pig)

$54.38

$48.69

$32.33

$34.65

$34.14

16 week Avg. Grow-Finish Feed Cost (C$/pig)

$80.44

$82.97

$85.20

$83.61

$80.61

Est. Margin after Feeder Pig and Feed

$23.95

$31.06

$44.60

$51.05

$62.50

Est. Farrow to Finish Feed Cost (C$/pig)

$111.36

$109.99

$112.40

$114.34

$112.87

Est. Farrow to Finish Margin after Feed (C$/pig)

$47.41

$52.73

$49.73

$54.97

$64.38

The Ontario Feed Market (Friday’s Closing Prices)

23-Dec-16

30-Dec-16

06-Jan-17

13-Jan-17

20-Jan-17

Chicago Corn (US $/bushel) – Mar’17

$3.4575

$3.5200

$3.5800

$3.5850

$3.6975

Chicago Soybeans (US $/bushel) – Mar’17

$9.8900

$10.0400

$9.9475

$10.4625

$10.6750

Soybean Meal ($/tonne Hamilton + $20)

$538.10

$537.65

$500.95

$525.86

$539.97

Old Crop Corn (farm price – $/tonne) based on Mar’17

$173.52

$177.94

$180.31

$179.32

$183.75

Western Ontario Feed Corn ($/tonne) – based on Mar’17

$196.66

$199.28

$200.78

$200.27

$204.22

New Crop Corn (farm price – $/tonne) based on Dec’17

$183.55

$185.03

$189.16

$187.49

$191.23

DDGS FOB Chatham/Sarnia/Alymer ($/tonne)

$137.50

$137.50

$137.50

$137.50

$140.00

 

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This post was written by Genesus