Farmscape for November 22, 2007  (Episode 2656)

The CEO of Humboldt based Big Sky Farms is convinced there's a bright future for Saskatchewan swine producers who are able to ride out the current low ebb in live hog prices.

The high value of the Canadian dollar, escalating feed costs and record U.S. slaughter numbers have put a tremendous strain on the profitability of Canadian swine producers.

Big Sky Farms CEO Florian Possberg is convinced the severity of the situation will prompt a substantial reduction in global pork production which will create a dramatic turn around in prices.

Clip-Florian Possberg-Big Sky Farms 

We're seeing quite a difference in how well the pork industry is doing depending on where you are on the globe.

China for example had low prices in 2006.

2007 their prices went up rather dramatically because supply and demand meant there was a shortage of pork.

The United States, who we typically benchmark ourselves to, has enjoyed a weak currency and a currency that quite frankly seems to be getting continually weaker and that has given them a real advantage in the export market so the Americans are doing well, the Chinese are doing well.

I think you look at the rest of the globe though whether it's Europe or Australia or Africa or Canada, we're really a hurting industry.

I would anticipate we could see up to ten percent of the sows disappear in the non-U.S. non-Chinese pork production industries.

That's going to lead to quite a contraction of supply.

I think, because this is such a dramatic crisis in terms of profitability we're faced with today, that typically you get a higher bounce when prices do recover because supplies will be restricted.

Possberg says Canadian hog producers are stressed now, they're not alone and he believes a lack of water, feedgrains and infrastructure will make it more difficult for producers in other regions to recover.

For Farmscape.Ca, I'm Bruce Cochrane.

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