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Canada / Ontario, Now what?

by 5m Editor
28 July 2011, at 10:29am

CANADA - "So the big question lying ahead is will there be any profitability in the months ahead?" asks Bob Fraser, Sales and Service, Genesus Ontario.

Although we’re experiencing record high hog prices equally high corn prices are squeezing the margins too the extreme. So will there be any reprieve? Attempting to predict the future is fraught with risks and using past years, as predictors of the future can be equally risky. However John Bancroft’s excellent charts above pose some interesting scenarios. Is 2011 going to be a replay of 2008 particularly with corn prices rising sharply during the spring and early summer and declining into the fall. No year unfolds exactly like another but the comparison is interesting especially with what has happened since this chart was last updated.

From the World Pork Expo (8 to 10 June) to the Ontario Pork Congress (22,23 June) corn quite rapidly and dramatically dropped approximately a dollar. Genesus doing a significant number of trade shows finds them quite good venues for getting the immediate pulse and mood of the industry. Where Jim Long diagnosed the mood from World Pork as "cautiously optimistic", the Ontario Pork Congress was considerably more upbeat. "Irrationally exuberant" hardly, but a sea change just the same. Like having some law of physics broken producers saw that corn could in fact do something other than just go up. This respite even if short lived did wonders in shifting the mood in reminding us that things can and do change. Sometimes quite rapidly and for the better and not always for the worse, even with the last two or three years seeming like we couldn’t catch a break.

The other thing we saw highlighted at this year’s Ontario Pork Congress was the importance of socializing with your peers. This year Genesus was the proud sponsor of the return of the “Beer Tent“ to the Ontario Pork Congress. For the last few years with a move to a new venue for the Congress the "beer tent" moved inside to a space that became a metaphor for the industry. Somewhere you didn’t want to be, a large, high ceilinged, no fun, no ambiance, sterile room, where after one beer you felt like you were drinking alone and better to go home. Sound like the industry of the last few years? This year the "Beer Tent" of old returned. The sun shone (although we had a little rain), we got a shot of encouragement in declining corn price and Viola! Producers optimistic by nature came to socialize with friends and associates. The place quickly became crowded and loud and all of a sudden you realize you’re not fighting the good fight alone and you’re starting to exchange some good ideas on how to manage the realities of the business, risk management, alternate feed ingredients, production tips etc. etc.

This is a tough business and not for the faint of heart but it is full a smart resourceful people. Get out and interact with them! It is easy and natural when things get challenging to put one’s nose closer to the grindstone but that isolation can prove to counter productive. There are producers out there figuring out and adapting to the "new normal." Seek them out and if on occasion you can do it in a fun and social venue all the better. Enjoy your summer. My crystal ball says "better days ahead!"