Farmscape for October 27, 2016

DGH Engineering estimates the cost of building new finisher barn capacity at 500 to 520 dollars per pig place.
DGH Engineering, on behalf of Manitoba Pork, has developed cost estimates for the construction of new hog production facilities.
DGH President Dennis Hodgkinson says right now finisher pig barn costs are in the order of 500 to 520 dollars per pig place, considerably higher than the approximately 300 dollars per place in 2001.

Clip-Dennis Hodgkinson DGH-Engineering:
Obviously there's been some increases in material costs.
That's just kind of natural sort of inflation.
Some of the costs are a little cyclical.
Commodity prices, steel's up and down, wood's up and down but there's been a general trend.
Labor costs have gone up I think a fair bit over that time period.
Once upon a time we had an extremely favorable condition for hiring cheap construction labor in the barn building industry but those people have migrated out of that industry back into commercial construction and so the specialization for some of these rural crews that did a lot of barn building has kind of been diluted a bit and so we've seen a significant increase in labor costs.
There's been significant creep in the basic requirements.
We've had some changes in building codes that have boosted our costs up probably something in the order of 15 percent related just to mandated code changes with the adoption of the Manitoba Farm Building Code.
We've also seen a steady migration in the demands placed on the industry to satisfy our environmental legislation and there's been a significant increase in costs associated with that.

Hodgkinson says, while our meat processors would like to see a cost somewhere in the order of 400 dollars per pig place, that's hard to achieve.
He says some producers, with a do it yourself approach, might be able to time those costs but 500 dollars is probably where we are.
For Farmscape.Ca, I'm Bruce Cochrane.

       *Farmscape is a presentation of Sask Pork and Manitoba Pork