Ethanol policies must be re-evaluated if production is to remain viable
Canadian pork producers are raising concerns over increasing animal feed prices due to the continuing U.S. drought, saying that ethanol policies and low crop yields in the U.S. are causing grain prices to rise to the point where it may no longer be economical to have pigs.
“Grain is by far the largest cost component of raising pigs, and marketplace realities are such that pork producers cannot simply pass along added costs to buyers,” said Canadian Pork Council Chair Jean Guy Vincent. ”Margins become squeezed and producers need to either absorb heavy losses or, unfortunately, get out of business.” The council said global policies on ethanol mandates need to be re-evaluated if feed is to remain affordable in the current climate.
“The status quo is not sustainable for the hog industry,” said Vincent. ”Pork producers need to work with all members of the value chain to address short and long term issues. The recent market conditions and feed prices were unimaginable two months ago and producers should not have to decide between losing their farm or increasing their debt to pay for unsustainable feed costs.”
A task group made up of producers and federal government officials has been established to review the situation and identify measures to assist the hog sector to manage through the latest challenge.