2007 Annual Report - Manitoba Pork Council

Manitoba Pork Council2007 Annual Report

our missionTo foster the sustainability and prosperity of the pork industryfor the good of all hog farmers and all Manitobans.our visionTo become a centre of excellence for pork production in Canada.Manitoba Pork Council

table of contentsTable of ContentsChairman’s Message .............................................................................................................................. 2General Manager’s Message ................................................................................................................... 3Manitoba Pork Council Districts ............................................................................................................. 4Delegates ............................................................................................................................................ 4Board of Directors ................................................................................................................................ 6Manitoba Pork Council Staff .................................................................................................................. 7Manitoba Initiatives ............................................................................................................................. 8Public Awareness ............................................................................................................................. 8Promotions ..................................................................................................................................... 8Producer & Industry Relations ............................................................................................................ 9U.S. Trade Advocacy ......................................................................................................................... 9Human Resources & Training ............................................................................................................10Community Relations & Sustainable Development ................................................................................11Animal Care ...................................................................................................................................12Quality Assurance ...........................................................................................................................12Traceability & Emergency Preparedness ..............................................................................................12Manitoba Hog Grading Inc. ...............................................................................................................12Research & Environment ..................................................................................................................13Manitoba Pork Council 2007 Annual Report1National Initiatives .............................................................................................................................14Canadian Pork Council (CPC) ............................................................................................................14Canada Pork International (CPI) .......................................................................................................14Pork Marketing Canada ....................................................................................................................15Financial Statements ...........................................................................................................................17

chairman’s letterKarl KynochLooking ahead, the short-term forecast may be dismal, but thereis hope on the horizon. Because of the large sow liquidationtaking place, supply will come down and prices will rise.Manitoba Pork Council 2007 Annual Report2TO SAY THAT 2007 WAS A CHALLENGE ISNOTHING SHORT OF AN UNDERSTATEMENT.A NUMBER OF INFLUENCING FACTORSCAME TOGETHER TO CREATE WHAT MANYPEOPLE HAVE CALLED “THE PERFECTSTORM.” NOT ONLY DID HOG PRICES DROPDRAMATICALLY, A GROWING DEMAND FORFEED GRAINS FROM THE ETHANOL MARKETINCREASED INPUT COSTS SIGNIFICANTLY.AT THE SAME TIME, THE CANADIANDOLLAR ESCALATED AT A RAPID RATE,SETTING A 40-YEAR RECORD WHEN ITSURPASSED THE U.S. DOLLAR.These factors combined to create afinancial crisis that has hit the hogindustry hard. Losses per pig haveexceeded $50 a head and hog producerscontinue to face some of the lowestprices in over a decade. Many are in direstraits and some have been forced toclose their barn doors after generationsof farming.In response to this crisis, Manitoba PorkCouncil was part of a delegation that hitParliament Hill in November to lobby thegovernment for immediate support.The Canadian Pork Council (CPC) andprovincial pork associations met withfederal Agriculture Minister Gerry Ritz,senior officials from Agriculture andAgri-Food Canada and federal Members ofParliament to discuss the industry’s survival.The hog industry crisis was not theonly issue on the agenda in 2007.COOL – or Country of Origin Labeling– could significantly affect the way wedo business. Manitoba ships about fourmillion weanlings a year down southand another one million finished hogson top of that. If U.S. processors closetheir doors to our product, we couldhave a backlog of hogs with nowhere togo. Manitoba Pork Council spent muchof 2007 working with our counterpartsacross the country to monitor thesituation and lobby our government torepresent Canadian producers’ interestsin this challenge. We worked very closelywith our American affiliates to have theCOOL legislation amended, which wouldbenefit hog producers on both sides ofthe border.We kicked off the year in Januaryparticipating in the South Dakota,Minnesota and Iowa Pork Congresses,some of the largest pork industry eventsin North America. We met with U.S.producers, government officials, industryrepresentatives and the media to shareour concerns about key issues facingthe industry and build on the NorthAmerican trading partnership we havedeveloped. Those efforts continued at theWorld Pork Expo in Iowa in June. We alsovisited with two major U.S. processors inMinnesota and South Dakota in October.The threat of COOL wouldn’t be suchan issue if we had sufficient processingcapacity in Manitoba. Hytek’s plans tobuild a much-needed facility in Winnipegwere dashed in the spring, when theOlyWest plant became a victim ofprovincial politics. Any hope of buildinga new hog processing plant near thecity was lost during the spring electioncampaign as all three political leadersspoke out against the plant. Council hadworked with the partners in this projectfor over two years.On a positive note, Hytek expanded itsbusiness in Manitoba by purchasingSpringhill Farms near Neepawa. Overthe next two years, the company plansto modernize the plant and increaseprocessing capacity. While it isdisappointing that our hopes for a $200million processing plant in Winnipegwere lost, Hytek continues to invest inManitoba. Maple Leaf in Brandon alsocontinues its expansion efforts, increasingits capacity by almost 50 per cent with afull double shift to be in place by 2009.Looking ahead, the short-term forecastmay be dismal, but there is hope onthe horizon. Because of the largesow liquidation taking place, supplywill come down and prices will rise.Annual worldwide demand for pork isalso increasing at a rate equivalentto Canada’s total production. With anexpansion at Maple Leaf’s Brandonplant and upgrades to Hytek’s facility inNeepawa, Manitoba hog producers will bewell positioned to supply the market.In closing, I’d like to thank my fellowboard members and the staff at ManitobaPork Council for their continuing supportand commitment. Despite the challenges,we have a very strong team working tofurther our industry for the sake of allproducers. I am confident that we willget through the challenges ahead andcontinue to build a prosperous industryin Manitoba.Karl KynochChairman, Manitoba Pork Council

general managers’s letterAndrew DicksonDespite the challenges before us, I am confident thatwe will get through these difficult times and have asustainable industry that benefits all Manitobans.THESE DAYS JUST ABOUT EVERYTHING IS“GOING GREEN.” THE ENVIRONMENT IS ATTHE TOP OF THE WORLD AGENDA WHENIT COMES TO ISSUES. THE HOG INDUSTRYIS NO EXCEPTION. THE ENVIRONMENTWAS ONE OF THE KEY ISSUES FACING OURINDUSTRY IN 2007.At the end of 2006, the Manitobagovernment imposed a “pause” onany new development or expansionin the hog industry. That pausecontinued throughout 2007 as the CleanEnvironment Commission (CEC) conductedits review of the environmental impact ofthe hog industry in Manitoba.A series of 17 public hearings took placeacross the province in March and April.Manitoba Pork Council made theopening and closing presentations,urging the CEC to be very cautious in itsrecommendations on the environmentalsustainability of the hog industryin Manitoba. Manitoba hog farmersalready follow some of the strictestenvironmental rules and regulations inthe world and the provincial governmentalso has a comprehensive safety net inplace to protect the environment.Based on the low turnout at the CECpublic hearings, the environmentalsustainability of the hog industry doesnot appear to be a major issue formost Manitobans. The vast majorityof the people participating in the CECprocess supported the hog industry.While Manitoba Pork Council asked theCEC to complete its report as quickly aspossible so the hog industry could moveforward, the report was not publicized inDecember 2007 as promised. The pauseon the industry remained in effect at theend of the year.Because environmental concerns and theimpact of the hog industry were at thetop of the agenda in 2007, ManitobaPork Council launched a full-scale publicrelations campaign to educate thepublic at large about hog farming in theprovince. This included a series of three,15-second television commercials, four15-second radio spots and an eight-weekprint ad campaign that ran in both theWinnipeg Free Press and the WinnipegSun. Key messages included the fact thatthe hog industry contributes close to$1 billion to the provincial economy eachyear, that hog farmers follow some of thestrictest environmental laws in existenceand that the hog industry employs over15,000 people in Manitoba. Pollingconducted in 2007 showed that we arestarting to change attitudes, but it willbe a long-term effort.We produced a “Green Book” on theManitoba hog industry’s commitmentto the environment. This report on thehog industry in Manitoba explored notonly the industry’s economic impact, butalso discussed the environmental effortsthat hog farmers undertake to protectprecious resources. The Green Book waslaunched at Manitoba Pork Council’s firsteverTaste of Elegance, an event wherewe showcased the pork industry and itscontributions to the province to over 100community leaders. The Green Book wassent to almost 1,000 decision makers inthe media, government and industry.There were also some staffing changesin 2007. Peter Mah, our Director ofSustainable Development, retiredin June. Peter was replaced by MikeTeillet, who joined Manitoba PorkCouncil after 30 years working withManitoba Intergovernmental Affairs. Inhis new role as Manager, SustainableDevelopment Programs, Mike will focuson environmental issues, research andmunicipal planning issues. We also hiredRon Marchenski on contract to set upthe Manitoba Pork Credit Corporation andadminister the federal Advance PaymentsProgram, which will become operationalin 2008. We were able to negotiate a $60million loan at a very attractive interestrate. This new program was part of ourefforts to help producers deal with theeconomic crisis in the industry.Manitoba Pork Council would not achievewhat it does without the commitmentand support of its 14-member boardof directors. Our board members worktirelessly in their efforts to build a solidfuture for the province’s hog farmers.Despite the challenges before us, I amconfident that we will get through thesedifficult times and have a sustainableindustry that benefits all Manitobans.Andrew DicksonGeneral Manager, Manitoba Pork CouncilManitoba Pork Council 2007 Annual Report3

manitoba pork council districts / delegates 2007Manitoba Pork Council DistrictsDISTRICTS 1-7 & 9 – Geographic DistrictsDISTRICT 8 & 10 – Hutterite Brethren ColoniesDISTRICT 11 – Maple Leaf Agri-Farms4DISTRICT 12 – The Puratone CorporationDISTRICT 13 – Hytek Ltd.DISTRICT 14 – N/A367Manitoba Pork Council 2007 Annual Report4DISTRICT 15 – Weanling ExportersDelegates 2007DISTRICT 1Karl KynochBaldur - DirectorDonald GrahamAltamontEdward GrenierSt. LeonClaude PoironSomersetTom KellerCarberryRick PrejetNotre Dame de LourdesSean ToltonKentonDISTRICT 3Garry ToltonNewdale - Director21DISTRICT 4Bryan FerrissBowsman - DirectorDavid EggieSwan RiverMichael SlepickaMinitonasBrian LesiukGilbert Plains59Jeroen Van BoekelStephenfieldLeonard WiebeCarmanDISTRICT 6George MathesonStonewall - DirectorPaul BerryFisher BranchOdiel SandersAltamontAndy CardyMinnedosaHarold ProppeSwan RiverDarvin FirmanArborgSteven WallcraftLa RiviereBrad RodgersMacGregorHenrik ThomsenRoblinDanny KleinsasserStony MountainDISTRICT 2Ray TimmermanTreherne - DirectorWilfred BaerSidneyDon NeufeldKolaMartin SharpeMinnedosaBrian ShawSolsgirthWim VerbruggenRiversDISTRICT 5Wendy FriesenLowe Farm - DirectorMatt AdemaSt. EustacheErnie SiemensMorrisBasil LewinArgyleCalvin PennerArgyleDISTRICT 7Bill VaagsDugald - Director

delegates 2007/delegates serving on committeesDelegates 2007 – continuedDan Van SchepdaelEast SelkirkHubert PreunSt. AndrewsCraig RieseLockportVolker WyrichOakbankJohn Van AertEast SelkirkDISTRICT 8Ben HoferRock Lake Colony - DirectorEdwin HoferMiami ColonyPhilip HoferJames Valley ColonyArnie WaldnerMilltown ColonyDavid WaldnerNorquay ColonyMike WaldnerCool Spring ColonyDISTRICT 9Rick BergmannSteinbach - DirectorHerb LeppSteinbachTom LeppelmannSteinbachPaul LoeppkyNivervilleAllen ReimerSteinbachDel ReimerSteinbachDISTRICT 10James HoferStarlite Colony - DirectorPeter HoferSkyview ColonyJoe WaldnerSunnyside ColonyLevi WaldnerTrileaf ColonyDave WollmanNewhaven ColonyMartin WollmanSpringhill ColonyDISTRICT 11Gary StottMaple Leaf Agri-Farms - DirectorGlen GrattonRichard E. BergmannDan KraftDISTRICT 12Darcy PaulsThe Puratone Corporation- DirectorWally DriedgerAb FreigPaul HowarthLyle LoewenJohn WielerDISTRICT 13Claude VielfaureHytek Ltd. - DirectorDenis VielfaureGuy BaudryCarol MartensSheldon StottDave PennerDISTRICT 15Larry FriesenRivers - DirectorTim HoferWillow Creek ColonyLorne TannasHamiotaDan KlippensteinNivervilleKen RempelNivervilleLauren WiebeGrunthalManitoba Pork Council 2007 Annual Report5Delegates Serving on CommitteesRick PrejetDISTRICT 2Quality Assurance and FoodSafety CommitteeSheldon StottDISTRICT 13Research and EnvironmentCommitteeCarol MartensDISTRICT 13Public Affairs CommitteeLorne TannasDISTRICT 15Research and EnvironmentCommittee

oard of directorsBoard of DirectorsManitoba Pork Council 2007 Annual Report6from left to rightKarl KynochChairmanDIRECTOR – DISTRICT 1Director, Canadian Pork CouncilMember, CPC Animal CareWorking GroupMember, CPC TradeAdvocacy Working GroupMember, Canada Pork InternationalNational Cereals ValueChain RoundtableMember, Provincial Safety NetsAdvisory CommitteeEx-Officio Member, Researchand Environment CommitteeEx-Officio Member, PublicAffairs CommitteeEx-Officio Member, QualityAssurance and Food SafetyCommitteeEx-Officio Member,Traceability CommitteeBryan FerrissVice-ChairmanDIRECTOR – DISTRICT 4Chair, Research and EnvironmentCommitteeExecutive Member, CanadianPork Council (CPC)Chair, CPC Identification andTraceability System WorkingCommitteeMember, CPC Safety NetsCommitteeMember, CPC Audit CommitteeMember, CPC Modernized MeatInspection Working GroupDirector, Manitoba LivestockManure Management InitiativeMember, Swan Lake WatershedConservation DistrictRay TimmermanExecutive MemberDIRECTOR – DISTRICT 2Chair, Quality Assurance andFood Safety CommitteeChair, Traceability CommitteeChair, Manitoba Pig Welfare GroupMember, Canadian QualityAssurance® Advisory CommitteeMember, Canadian QualityAssurance® TechnicalWorking GroupMember, Canadian IntegratedProgram for AntimicrobialResistance Surveillance (CIPARS)Working GroupMember, Carberry AquiferRoundtableMember, Manitoba FarmAnimal CouncilMember, Stephenfield LakeWatershed ManagementPlan CommitteeWendy FriesenExecutive MemberDIRECTOR – DISTRICT 5Chair, Public Affairs CommitteeChair, Manitoba FarmAnimal CouncilMember, Manitoba PigWelfare GroupMember, Winkler AquiferRoundtableMember, LaSalle River WatershedPlanning Advisory TeamMissing from photoMembers of the BoardGarry ToltonDIRECTOR – DISTRICT 3Member, Research andEnvironment CommitteeDirector, Farm StewardshipAssociation of ManitobaMember, Upper AssiniboineWatershed PlanningAdvisory TeamGeorge MathesonDIRECTOR – DISTRICT 6Member, Public Affairs CommitteeMember, Provincial AgriculturalSafety and Health CommitteeCouncil Representative,Keystone Agricultural ProducersBill VaagsDIRECTOR – DISTRICT 7Member, Public Affairs CommitteeDirector, Canada Pork InternationalMissing from photoBen HoferDIRECTOR – DISTRICT 8Member, Quality Assurance andFood Safety CommitteeRick BergmannDIRECTOR – DISTRICT 9Member, Public Affairs CommitteeMissing from photo

oard of directors/manitoba pork council staffBoard of Directors - ContinuedJames HoferDIRECTOR – DISTRICT 10Member, Research andEnvironment CommitteeDirector, Manitoba LivestockManure Management InitiativeDirector, Manitoba Hog Grading Inc.Member, Provincial Trade AdvisoryCommittee (Pork ProductionTechnician)Gary StottDIRECTOR – DISTRICT 11(Maple Leaf Agri-Farms)Director, Canadian Pork CouncilMember, Canadian Pork CouncilPCVAD Program GroupMember, Traceability CommitteeDarcy PaulsDIRECTOR – DISTRICT 12(The Puratone Corporation)Member, Quality Assurance andFood Safety CommitteeMember, Traceability CommitteeMember, National Pork Value ChainRoundtableClaude VielfaureDIRECTOR – DISTRICT 13(Hytek Ltd.)Missing from photoLarry FriesenDIRECTOR – DISTRICT 15Member, Traceability Committeefrom left to rightAndrew DicksonGeneral ManagerJulie BairdExecutive AssistantMiles BeaudinSwine Program Specialist& CQA® CoordinatorTracey BryksaManager, Public Affairs& MarketingJeff ClarkProducer ServicesCyndy GoosAccountantTarrah JakubowskiBBQ Program CoordinatorMissing from photoKaren LeclercFront Desk CoordinatorManitoba Pork Council StaffMiriam ManswellAdministrative ServicesRon MarchenskiAdvance Payments ProgramManagerDwayne MarlingCommunications Specialist &Technology TransferMissing from photoMarlene McDonaldPork Promotions &Consumer EducationMissing from photoSusan RieseSpecial Programs CoordinatorMike TeilletManager, SustainableDevelopment ProgramsJason CareAuditor, Manitoba HogGrading Inc.Manitoba Pork Council 2007 Annual Report7

manitoba initiativesPublic Awareness • PromotionsManitoba InitiativesManitoba Pork Council 2007 Annual Report8PUBLIC AWARENESSWith the hog industry underpublic scrutiny for most of 2007,Council focused its advertisingefforts on educating the publicabout hog farming and thecontributions the industry makesto the province. According tomarket research conducted byCouncil early in 2007, the publicat large knows very little aboutthe hog industry in Manitoba.A multimedia advertising campaign waslaunched in March 2007 to educate thepublic about the benefits of the hogindustry, including job creation, economicimpact and environmental efforts. A fourpageinsert in the Winnipeg Free Pressentitled “Straight Talk on Pork” kicked offthe campaign in early March. The insert ranin the Steinbach Carillon, Portage la PrairieDaily Graphic and The Brandon Sun in April.Print ads ran in both the Winnipeg FreePress and Winnipeg Sun through May.Council also produced televisioncommercials and radio spots highlightingkey messages about the Manitoba hogindustry. These commercials ran on awide variety of stations from Marchthrough May to coincide with the CleanEnvironment Commission’s public hearingson the environmental impact of thehog industry in Manitoba. A secondseries of television commercials wasbroadcast in the fall. According to pollingconducted before and after Council’scampaign, public opinion of the hogindustry improved slightly, but it is along-term effort.Consumers were encouraged to “pickpork” when they tuned in to CTV’spopular “Great Tastes of Manitoba”television series. Two new pork showsaired in 2007 and positioned Manitobapork as a wholesome, healthy, versatileand delicious meat. This effort wascomplemented by the production anddistribution of new recipe brochures.Radio listeners listened to Council’sdaily radio program – Farmscape –which is heard on CKLQ in Brandon, inSaskatchewan (in partnership with SaskPork) and worldwide at www.farmscape.ca.As a core sponsor, Council continuesto be very active in Agriculture in theClassroom- Manitoba (AITC-M), whichprovides opportunities to educatechildren about agriculture. Council alsoeducates thousands of people about hogproduction at “Thru the Farm Gate” atBrandon’s Royal Manitoba Winter Fair, theRed River Exhibition’s “Touch the Farm”and “Amazing Agriculture Adventure.”PROMOTIONSManitoba Pork Council launched its PorkSports program in 2007. The goal of theprogram is to reach a wide consumeraudience through the sponsorshipof targeted sporting events. Councilsponsored two Winnipeg Goldeyes gamesand the New Year’s Eve game of theManitoba Moose. Both sponsorshipsincluded excellent promotion, includinglogo placement, commercial spots anda stress pig toss. Council also did aPork on a Bun barbecue prior to bothGoldeyes games, raising money for theField of Dreams Foundation. Council gotmore involved with curling in Manitobaby sponsoring the Manitoba CurlingAssociation’s (MCA) Men’s Bonspiel.The “Hurry Hog” curling program was asuccess in 2007 with participation of 62curling clubs.Manitoban Pork Council’s BBQ Cartprogram served up over 25,606 Pork ona Buns at 186 events. This included 42sponsored events, including 11 COOL Jazzgolf tournaments in support of various

manitoba initiativesProducer & Industry Relations • U.S. Trade Advocacylocal and provincial charities. The BBQCart program continues to be an excellentpublic relations tool, building publicawareness and promoting pork at thesame time.In October 2007, Manitoba Pork Councilheld its first annual Taste of Eleganceevent at the Delta Hotel. Over 100community leaders, including electedofficials, government staff, industryrepresentatives and media, attended theevent sampling delicious pork appetizersand learning more about the hog industryin Manitoba. This event also served asthe launch for Council’s Green Book, areport on Manitoba’s hog industry. Thebook, which included information on thehog sector’s economic and environmentalcontributions, was mailed to about 1,000decision makers.PRODUCER &INDUSTRY RELATIONSThe Swine Stewardship Awards werepresented at Council’s annual meetingin April 2007. The following awardswere presented to producers, communitygroups and industry partners whoseoutstanding efforts contributed to thesustainable growth and prosperity ofManitoba’s pork industry:• The Friend of the Industry Award waspresented to Meyers Norris Penny LLP,recognizing the firm’s many yearsof visionary leadership, integrity,respect and innovation in assistingManitoba’s hog industry grow, succeedand prosper.• The Swine Steward Award waspresented to Edwin Kleinsasser forhis commitment to innovation andpromotion of high-health standards forhog production in Manitoba.• The Education Award was presentedto Assiniboine Community Collegeand its Swine Education Teamfor their visionary delivery offocused agricultural educationand contributions to Manitoba’shog industry.• The Industry Service Award waspresented to Manitoba Pork MarketingCo-op Inc. for continuous innovationand dedicated service to Manitobahog producers.• The Environment Award was presentedto Dr. Katherine E. Buckley ofAgriculture and Agri-FoodCanada’s Brandon Research Centrefor leadership in environmentalresearch and sustainability.U.S. TRADE ADVOCACYIn 2006, Council implemented a tradeadvocacy program focused on enhancingtrade relations with the hog industry inthe U.S. The program was establishedwith a goal to reduce the risks of futuretrade actions against Canadian live swineexports to the U.S. or exports of Canadianpork and pork products.In January 2007, a delegation of staffand directors from Manitoba Pork Councilattended Pork Congresses in Minnesota,Iowa and South Dakota. In additionto speaking with thousands of U.S.producers and industry representativesat Council’s large trade show booth, theA multimediaadvertising campaignwas launched inMarch 2007 toeducate the publicabout the benefitsof the hog industry,including job creation,economic impact andenvironmental efforts.Manitoba Pork Council 2007 Annual Report9

manitoba initiativesHuman Resources & TrainingTrade advocacy is anongoing effort. In June,Council attended the WorldPork Expo in Des Moines,Iowa to talk with producersand industry officials aboutthe possible impacts of COOL– Country of Origin Labeling.Manitoba Pork Council 2007 Annual Report10Manitoba delegation met one-on-onewith the Iowa and Minnesota FarmBureaus, Minnesota’s Commissionerof Agriculture, Iowa’s Secretary ofAgriculture and the boards of theIowa and Minnesota Pork ProducersAssociations. Council did a number ofinterviews with key media in the U.S.Council’s trade advocacy effortswere very well received. In April,representatives from the Iowa andMinnesota Pork Producers Associationsdrove up to Manitoba to attend Council’sannual general meeting. Following themeeting, they took part in a one-daytour of the hog industry in southeasternManitoba, driving through “hog alley”,touring barns at Starlite Colony andvisiting Puratone’s offices.Trade advocacy is an ongoing effort. InJune, Council attended the World PorkExpo in Des Moines, Iowa to talk withproducers and industry officials aboutthe possible impacts of COOL – Countryof Origin Labeling. In 2008, Councilplans to participate in both of thePork Congresses in Iowa and Minnesotaonce again.HUMAN RESOURCES& TRAININGIn 2007, Manitoba Pork Council workedextensively to develop employmentstandards recommendations for the hogindustry. Council also worked closely withHuman Resources and Skills DevelopmentCanada (HRDC) to reduce immigrationprocess times. HRDC and Labour andImmigration were also briefed on currentindustry status and are cognizant ofindustry needs.

manitoba initiativesCommunity Relations & Sustainable DevelopmentCouncil also attended Winnipeg, Brandonand Beausejour career fairs to encouragepeople to think about a career in the hogindustry. Assiniboine Community College’sprograms were a success in 2007. Sixtypeople attended Pork Production ManagerCertificate Program courses in Brandonand the Steinbach region. Eleven studentsentered the Pork Production TechnicianApprenticeship Program.COMMUNITY RELATIONS &SUSTAINABLE DEVELOPMENTIn 2007, the industry suffered throughthe ‘pause’ on new hog barns. Councilfocused its efforts on preparing andmaking presentations and attending allof the CEC’s public hearings.Although the government stated theCEC’s report would be issued by December2007, the report was not finished by yearendand the pause on new hogbarns continued. The report isexpected by the end of February2008. Council continued topress the government to end theban and emphasized producerscannot sustain new rules andregulations that add to the costsof production.they undertake their livestock operationspolicies. Council continues to monitordevelopment plans and zoning changesand provide local input where necessary.In September, the Province amended ThePlanning Act by changing the definitionof what constitutes a single livestockoperation. Any barns located within 800metres of each other will be considereda single operation. Council sent awritten submission to the governmentemphasizing the change was unnecessaryand that any new regulations could onlycause further harm to an alreadyfragile farm group. Council continuedto maintain a presence at communityand municipal events, such as theAssociation of Manitoba Municipalities(AMM) meetings and the ManitobaConservation Districts Association(MCDA) annual meeting.Manitoba Pork Council 2007 Annual Report11Despite the fact that allmunicipalities were to havelivestock operations policies intheir development plans (underthe 2006 Planning Act) by theend of 2007, most did not. It isbelieved that most municipalitiesare waiting for the CEC reportand government’s reaction before

manitoba initiativesAnimal Care • Quality Assurance • Traceability & Emergency Preparedness • Manitoba Hog Grading Inc.Manitoba Pork Council 2007 Annual Report12ANIMAL CAREIn July 2007, a delegation from ManitobaPork Council met with those responsiblefor the animal transport review initiatedby the Canadian Food Inspection Agency.The purpose of the visit to Ottawa wasto reinforce the industry’s reliance onattaining markets throughout NorthAmerica. Council also continued toimprove cross border delays of animalsentering the U.S. The Trucker QualityAssurance (TQA) program was deliveredto seven locations in Manitoba with 165people attending.QUALITY ASSURANCEAll CQA veterinarians attended an updatesession in Winnipeg in July 2007.National CQA coordinator Dawn Lawrencepresented new updates and reviewed theprogram to ensure consistent validationprocesses. To ensure accountability,Manitoba Pork Council conducted 10farm audits to verify CQA compliance.The audits revealed high levels of CQAcompliance, which verified farm managersand their staff, along with CQA validators,are following the program.Farm (premises) registration and theslaughter tattoo registration programcontinue to play a fundamental role inidentifying animal movements, whilethe western Canadian swine slaughterreporting system is now collectinginformation from abattoirs in theWest. These three elements provided acentralized, quick reference for tracinganimals from packinghouse back tofinisher barn by their tattoo number on adaily basis.Farm-to-farm movement reporting willone day be a reality. In 2007, Councilcompleted two pilot projects thatevaluated different reporting tools forcapturing animal movement informationfrom the field. One of the projects usedmobile phones for reporting shipping andreceiving information to a central datawarehouse. The results demonstrated thattraceability information can be reportedin a simple, quick and a practical manner.However, much work remains to be done.Council actively participates in preparingthe province’s livestock sector foranimal health emergencies throughManitoba’s Avian Influenza OperationsCommittee. Composed of 12 federal andprovincial government departments andfour provincial commodity groups, thecommittee holds a wealth of expertise,and will soon be working to prepareresponse plans for swine-relatedhealth crises.MANITOBA HOG GRADING INC.Manitoba Hog Grading Inc. continuesto provide hog carcass grading servicesfor producers in federally-inspectedprocessing plants in Manitoba. Hoggrading displays and promotionalmaterials are used at trade and industryshows to improve awareness of theservice and provide more informationto producers.TRACEABILITY ANDEMERGENCY PREPAREDNESSThrough the Canadian Pork Council’sAnimal Identification and TraceabilityCommittee, Manitoba Pork Councilcontinues to be a key participant indesigning Canada’s national SwineTraceability System. This industry-ledeffort has achieved key milestonestowards the full implementation ofswine traceability.

manitoba initiativesResearch & EnvironmentNew and innovativedevelopments in foodsafety, animal care andproduction research arecritical to the long-termsuccess of Manitoba’slivestock sector.RESEARCH & ENVIRONMENTResearch is one of Manitoba Pork Council’skey areas of focus. New and innovativedevelopments in food safety, animalcare and production research are criticalto the long-term success of Manitoba’slivestock sector. In addition to fundingresearch, Manitoba Pork Council sponsorsand promotes a wide range of practicalseminars, conferences, workshops andspeakers to deliver practical informationand tools directly to producers.Manitoba Pork Council provides ongoingfunding to research in these areasthrough the University of Manitoba andits National Centre for Livestock andthe Environment (NCLE), Prairie SwineCentre Inc. (PSC), the Manitoba LivestockManure Management Initiative (MLMMI),Lake Winnipeg Research Consortium(LWRC) and the Vaccine and InfectiousDisease Organization (VIDO).In 2007, Manitoba Pork Councilcontributed $195,000 to MLMMI tosupport research, development anddemonstration projects, bringing its10-year total to just under $2 million.As a member of the Lake WinnipegResearch Consortium (LWRC) sinceits establishment in August 1998,Council continues to financially supportresearch on the future of Manitoba’slargest freshwater lake. Council’scontinuing dedication to Manitoba-basedenvironmental research and education wasillustrated by the fulfilment of a multiyear$500,000 funding commitment toNCLE and a further $250,000 to NCLE’snew Glenlea Farm Education Centre. In2007, an additional $200,000 was thefirst year payment of a commitment to afurther $600,000 over three years (2007-2009) to the Glenlea Farm EducationCentre, which will be an interactiveshowcase for modern agriculture.Manitoba Pork Council 2007 Annual Report13

national initiativesCanadaian Pork Council • Canada Pork InternationalNational InitiativesManitoba Pork Council 2007 Annual Report14CANADIANPORK COUNCILThe Canadian Pork Council (CPC), thenational federation of provincial hogproducer associations, focuses its workon issues and opportunities for theadvancement of the Canadianhog industry.Since early 2007, the industry has faced a‘perfect storm’ caused by a high Canadiandollar, drastically increased feed costsand low market prices. This has resultedin severe liquidity issues for producers.CPC developed a proposal to addressthese short and medium-term issues andbridge the gap for producers to help themsurvive the crisis. The proposal included ashort-term loan program and changes tothe current Canadian Agricultural IncomeStabilization (CAIS) program.Presentations were made to both theHouse of Commons and Senate StandingCommittees on Agriculture. CPC met withrepresentatives from the Bank of Canadaand the Farm Credit Corporation tosensitize these groups about the industrycrisis. Meetings were held with manyMembers of Parliament, Agriculture andAgri-Food Minister Gerry Ritz and manysenior bureaucrats and officials. A widevariety of tools, such as media releases,letters to the editor and editorials,received national attention. A pressconference was held at the NationalPress Gallery in December.In 2007, a strategic review processbegan to discuss governance andCPC’s mandate. A steering committee wasformed to examine these issues andmake recommendations. Phase 1 ofthe review involved meetings with thesteering committee and CPC’s provincialmembers, regional workshops and thedevelopment of a situation document.Phase 2 will include a comparison ofrelevant governance models, a planningsession and a strategic plan for CPC.CPC continues its work on many otherimportant industry issues, including:• Monitoring developments with Countryof Origin Labeling, trade negotiationsand trade advocacy• Developing a national hogidentification and traceabilitymovement reporting system and swinemovement database for Western Canada• Food safety issues addressed throughthe national CQA® program and theavailability of animal health products• Promoting pork in a healthydiet, including activities aimedat government officials, healthprofessionals and mediaCANADA PORKINTERNATIONALCanada Pork International is the exportpromotion agency of the Canadian prokindustry. Based on Statistics Canadadata, total Canadian pork exports in 2007amounted to 996,985 tonnes, a fourper cent decrease from 2006 (1,037,967tonnes) and were valued at $2.391billion, a decrease of five per cent fromthe $2.536 billion registered in 2006.Canadian pork was sold to 92 differentcountries in 2007.Aggressively pursuing new markets andmaintaining access to existing marketshas played, and will continue to play, akey role in Canada’s ability to remain aleading pork exporter. While a numberof issues were resolved over the lastyear, new ones continue to appear.Promotion in Japan is now more focusedon supermarkets and restaurant chainsselling Canadian pork. More than 1,500in-store demos were conducted in Japanin 2007. Generic promotion activitieswere also undertaken in both Koreaand Singapore.Technical seminars and trade showsare CPI’s preferred means to promoteCanadian pork and the Canadian porkindustry’s ability to supply high qualityproducts to a new market. In 2007,CPI organized seminars in China andVietnam. CPI also had a booth at major

national initiativesPork Marketing CanadaAggressively pursuing newmarkets and working hardat maintaining accessto existing markets hasplayed, and will continueto play, a key role inCanada’s ability to remaina leading pork exporter.international trade shows to allowmembers to develop relationships withbuyers. These included FOODEX (Japan),Food Expo (Puerto Rico), World FoodMoscow (Russia), ANUGA (Germany) andHavana Fair (Cuba).PORK MARKETING CANADAIn 2007, Manitoba Pork Council joinedforces with Ontario Pork and AlbertaPork to create a consumer marketingalliance called Pork Marketing Canada.The strategic partnership was designed tomaximize resources and promote pork ona national level.Pork Marketing Canada will partner withthe retail and foodservice industries,along with packers and processors,to promote pork to consumers acrossthe country. The alliance will alsopartner with health professionals andorganizations to reinforce pork as ahealthy food choice. A national websitewas launched at www.putporkonyourfork.com, offering information abouthandling, nutrition, pork cuts andrecipes, as well as informationfor processors, foodserviceoperators and retailers.Key initiatives for 2008include a nationalmarbling programand creating a “BuyCanadian” label programto encourage consumersto support Canadianpork producers.Manitoba Pork Council 2007 Annual Report15

fi nancial statementsManitoba Pork Council 2007 Annual Report16

fi nancial statementsManitoba Pork Council2007 Financial StatementsManitoba Pork Council 2007 Annual Report17

auditors’ reportAuditors’ ReportTo the Members of Manitoba Pork Council,We have audited the balance sheet of Manitoba Pork Council as at December 31, 2007 and the statements of revenue andexpenses, changes in net assets and cash flows for the year then ended. These financial statements are the responsibility ofthe Council’s management. Our responsibility is to express an opinion on these financial statements based on our audit.Manitoba Pork Council 2007 Annual Report18We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that weplan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.An audit also includes assessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation.In our opinion, these financial statements present fairly, in all material respects, the financial position of the Council as atDecember 31, 2007 and the results of its operations and its cash flows for the year then ended in accordance with Canadiangenerally accepted accounting principles.Winnipeg, CanadaMarch 7, 2008.Chartered Accountants

alance sheetAs at December 31Balance Sheet2007 2006$ $ASSETSCurrentCash 225,546 999,850Short-term investments [notes 2 and 3] 2,827,731 2,563,970Accounts receivable [notes 5, 8 and 9] 650,487 454,003Prepaid expenses 27,394 11,568Total current assets 3,731,158 4,029,391Capital assets, net [note 4] 292,108 304,656Investment [note 5] 30,626 35,1054,053,892 4,369,152LIABILITIES AND NET ASSETSCurrentAccounts payable and accrued liabilities [note 6] 341,926 414,851Commitments [note 13]Net assetsInvested in capital assets 292,108 304,656Crisis Management Fund 150,000 300,000Closure Fund 550,000 550,000Unrestricted 2,719,858 2,799,645Total net assets 3,711,966 3,954,3014,053,892 4,369,152Manitoba Pork Council 2007 Annual Report19See accompanying notesOn behalf of the Board:DirectorDirector

statement of changes in net assetsYear ended December 31Statement of Changes in Net AssetsManitoba Pork Council 2007 Annual Report20Invested Crisisin capital Management Closureassets Fund Fund Unrestricted Total$ $ $ $ $[note 1[b][ii]]Balance, December 31, 2005 372,511 300,000 550,000 2,684,746 3,907,257Excess (shortfall) of revenueover expenses for the year (100,798) — — 147,842 47,044Transfer for capital purchases 32,943 — — (32,943) —Balance, December 31, 2006 304,656 300,000 550,000 2,799,645 3,954,301Change in accounting policy [note 2] — — — 127,287 127,287Balance, January 1, 2007 304,656 300,000 550,000 2,926,932 4,081,588Shortfall of revenue over expenses for the year (140,941) (150,000) — (78,681) (369,622)Transfer for capital purchases 128,393 — — (128,393) —Balance, December 31, 2007 292,108 150,000 550,000 2,719,858 3,711,966See accompanying notes

statement of revenue and expensesYear ended December 31Statement of Revenue and Expenses2007 2006$ $REVENUEMarket hog levy 3,739,051 3,714,674Weanling levy 593,277 522,064Breeding stock levy 8,794 13,949Program revenue 16,903 29,830Investment and other [notes 2 and 5] 8,016 122,9984,366,041 4,403,515EXPENSESAnimal care 114,921 50,392Community relations and sustainable development 46,374 75,898Environmental stewardship 228,669 199,374Food safety 59,201 71,387Foreign animal disease readiness 30,342 10,897Human resources and training 9,445 19,729Industry association 585,950 568,833Public affairs and producer relations 809,935 609,914Quality assurance 72,424 75,773Swine production research [note 11] 280,000 280,000Swine Research and Development Corporation [note 8] 17,600 75,000Trade advocacy 112,267 78,909Workplace safety and health 30,998 24,0332,398,126 2,140,139Administration expenses [schedule] 1,851,380 1,918,4404,249,506 4,058,579Excess of revenue over expenses before the following 116,535 344,936Trade challenge levy 9,263 32,812125,798 377,748Share of shortfall of revenue over expenses ofManitoba Hog Grading Inc. [note 5] (4,479) (4,906)121,319 372,842NCLE Capital Funding [note 10] — (150,000)Glenlea Farm Education Centre Funding [note 10] (200,000) (75,000)(78,681) 147,842Amortization expenses (140,941) (100,798)Country of Origin Labeling campaign costs [note 1[b][ii]] (150,000) —Excess (shortfall) of revenue over expenses for the year (369,622) 47,044Manitoba Pork Council 2007 Annual Report21See accompanying notes

statement of cash flowsYear ended December 31Statement of Cash FlowsManitoba Pork Council 2007 Annual Report222007 2006$ $OPERATING ACTIVITIESExcess (shortfall) of revenue over expenses for the year (369,622) 47,044Add items not involving cashAmortization 140,941 100,798Share of shortfall of revenue over expenses ofManitoba Hog Grading Inc. 4,479 4,906Unrealized change in fair value of short-term investments 131,009 —(93,193) 152,748Net change in non-cash working capitalbalances related to operations (285,235) 481,168Cash provided by (used in) operating activities (378,428) 633,916INVESTING ACTIVITIESPurchase of short-term investments (267,483) (102,340)Capital asset additions (128,393) (32,943)Cash used in investing activities (395,876) (135,283)Net increase (decrease) in cash during the year (774,304) 498,633Cash, beginning of year 999,850 501,217Cash, end of year 225,546 999,850See accompanying notes

schedule of administration expensesYear ended December 31Schedule of Administration Expenses2007 2006$ $Bad debt expense 28,000 69,000Board [note 7] 265,714 246,698Business tax 2,976 3,744Computer support 36,872 35,648Conferences 4,097 4,247Employee benefits [note 12] 117,539 103,925Employee training 8,283 14,693Insurance 7,715 7,118Maintenance 27,146 24,023Meetings 185,726 222,188Memberships and subscriptions 10,622 10,699Miscellaneous 25,156 16,769Office supplies 32,286 38,440Postage 20,482 52,560Professional fees 64,375 108,041Rent/lease [note 5] 59,219 59,825Salaries 825,820 787,247Telephone 37,444 28,152Travel 77,376 70,875Utilities 14,532 14,5481,851,380 1,918,440See accompanying notesManitoba Pork Council 2007 Annual Report23

notes to fi nancial statementsDecember 31, 2007Notes to Financial StatementsManitoba Pork Council 2007 Annual Report241. SIGNIFICANT ACCOUNTING POLICIES[a] Operations of Manitoba Pork Council (the “Council”)Manitoba Pork Council is the membership association of the Province’shog producers. The mission of the Council is to foster the sustainabilityand prosperity of the pork industry for the good of all hog farmers andall Manitobans.The Council collects an $0.80 [2006 - $0.80] levy on market hogsproduced and processed in Manitoba, including sows and boars. As well,a levy is collected on pigs involved in inter-provincial and export tradeat $0.80 [2006 - $0.80] on market hogs, sows and boars and $0.19[2006 - $0.19] on weanlings [hogs under 30 kgs]. The levy is subject toperiodic review and approval by the Manitoba Farm Products MarketingCouncil. The levy is the major revenue source for the Council’s operation.A special trade challenge levy was imposed effective July 2004 throughDecember 2005 which called for an additional $0.50 levy per hog.The Council is a not-for-profit organization and is not subject to taxunder the provisions of the Income Tax Act (Canada).[b] Revenue recognitionThe Council follows the deferral method of accounting for revenueand its net assets. Restricted contributions are recognized as revenuein the year in which the related expenses are incurred. Unrestrictedcontributions are recognized as revenue when received or receivable ifthe amount to be received can be reasonably estimated and collection isreasonably assured.Levy revenue is recognized in the year that hogs are processed orexported, provided collection of the levies is probable.Interest revenue is recognized as earned.Net assets are accounted for in the categories described below torecognize various restrictions imposed on the use of the Council’s funds:[i]Invested in capital assetsThese net assets consist of the Council’s investment in itscapital assets.[ii] Crisis Management FundThe Crisis Management Fund was established to offset theunforeseen irregularity of levy revenue and address unforeseenemergencies. In 2007, the Council determined that $150,000 ofthe Crisis Management Fund would be utilized with respect to theCountry of Origin Labeling campaign costs.[iii] Closure FundThe Closure Fund was established to allow the Council to meet alloutstanding obligations in the event of a wind-up of operations.[iv] UnrestrictedUnrestricted net assets are comprised of the net accumulatedrevenue and expenses of the general operations of the Council,less amounts transferred to the Crisis Management Fund and theClosure Fund and amounts transferred for capital purchases.[c] Short-term investments and investment incomePublicly-traded securities [Canadian equities] are valued based on thelatest bid prices and money market funds are valued based on reportedunit values. Corporate and government fixed income bonds are valuedbased on reported unit values plus accrued income, which approximatesfair value. Transactions are recorded on a trade date basis andtransaction costs are expensed as incurred.Investment income, which consists of interest, dividends and realizedand unrealized gains and losses, is included in investment and otherrevenue in the statement of revenue and expenses.[d] Capital assetsCapital assets are stated at cost less accumulated amortization. Normalmaintenance and repairs are expensed as incurred. Amortization isprovided over the estimated useful lives of the assets as follows:Leasehold improvementsFurniture and equipmentComputer equipmentComputer software and website development10% straight-line20%–30% declining balance30% declining balance25% straight-line[e] InvestmentsJoint ventureThe investment in Manitoba Hog Grading Inc. is a non-share jointventure interest. The investment is accounted for by the equity method.Under this method, the Council included in income its share of theshortfall of revenue over expenses of the company.Controlled organizationsThe results of the controlled organizations are not consolidated and aredisclosed in the notes to the financial statements. Contributions madeby the Council to these organizations are expensed as incurred.[f] Program expensesProgram expenses are reported on a total expense basis. Some programshave related income from grants or industry contributions, which arerecorded as revenue.[g] Retirement allowancesRetirement allowances are provided to certain qualifying employees andare based on Manitoba Government Employees’ Union guidelines. The costs

notes to fi nancial statementsDecember 31, 2007of benefits earned by employees are charged to expenses as services arerendered. The cost reflects management’s best estimates of the length ofservice, salary increases and ages at which employees will retire.[h] Financial instrumentsFinancial instruments include cash, short-term investments, accountsreceivable, and accounts payable and accrued liabilities. The Council issubject to market price risk and interest rate price risk with respect toits short-term investment portfolio. To manage these risks, the Councilhas estimated a target mix of investment types designed to achievethe optimal return within reasonable risk tolerances. Unless otherwisestated, it is management’s opinion that the Council is not exposed tosignificant currency or credit risk arising from its financial instruments.2. CHANGE IN ACCOUNTING POLICIESEffective January 1, 2007, the Council adopted the recommendationsof CICA 3855: Financial Instruments – Recognition and Measurementand CICA 3861: Financial Instruments – Disclosure and Presentation.CICA 3855 establishes standards for recognizing and measuring financialinstruments, including the accounting treatment for changes in fairvalue. As required by CICA 3855, all short-term investments are nowpresented at fair value. In prior years, short-term investments wererecorded at cost, net of a write-down if market was less than cost on aportfolio basis. As permitted by CICA 3855, the Council’s other financial3. SHORT-TERM INVESTMENTSassets and liabilities continue to be presented at amortized cost whichapproximates fair value.As required by the transitional provisions of CICA 3855, the accountingpolicy change from cost to fair value was adopted retroactively, withoutrestatement of the prior year’s financial statements. As a result of thechange, as at January 1, 2007, short-term investments were increased by$127,287 and unrestricted net assets were increased by $127,287.Short-term investments consist of the following:2007 2006Market Cost Market Cost$ $ $ $Money market funds 276,690 276,690 80,314 80,314Government fixed income bonds 4% to 5.7%maturing May 6, 2008 to June 18, 2029 988,533 995,577 1,093,201 1,081,531Corporate fixed income bonds 3.7% to 6.0%maturing September 25, 2008 to June 30, 2015 1,175,127 1,201,223 1,162,065 1,071,680Equities, Canadian 387,381 357,963 355,677 330,4452,827,731 2,831,453 2,691,257 2,563,970Manitoba Pork Council 2007 Annual Report254. CAPITAL ASSETSCapital assets consist of the following:2007NetAccumulated bookCost amortization value$ $ $Leasehold improvements 405,943 312,913 93,030Furniture and equipment 277,846 201,008 76,838Computer equipment 249,852 181,109 68,743Computer software 255,994 219,531 36,463Website development 19,467 2,433 17,0341,209,102 916,994 292,1082006NetAccumulatedbookCost amortization value$ $ $362,004 274,516 87,488265,892 182,631 83,261213,935 159,344 54,591238,878 159,562 79,316- - -1,080,709 776,053 304,656

notes to fi nancial statementsDecember 31, 20075. INVESTMENT IN JOINT VENTUREThe Council has entered into a joint venture agreement with twoManitoba pork processors, which established Manitoba Hog Grading Inc.The company is a not-for-profit entity which was established toperform audits on carcass grading proficiency of federally inspected porkprocessing plants.A financial summary of the Council’s 50% interest in this entity as atDecember 31 and for the years then ended is as follows:2007 2006$ $Financial positionAssets 38,545 41,241Liabilities 7,919 6,136Net assets 30,626 35,105Manitoba Pork Council 2007 Annual Report26Results of operationsRevenue 43,901 42,205Expenses 48,380 47,111Shortfall of revenue over expenses (4,479) (4,906)Cash flowsCash flow used in operations (4,873) (1,360)At December 31, 2007, there was a balance of $9,005 [2006 - $6,907]owing from Manitoba Hog Grading Inc. to the Council. This amount isincluded in the Council’s accounts receivable.6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIESAccounts payable and accrued liabilities consist of the following:The Council charged Manitoba Hog Grading Inc. $1,800 [2006 - $1,800]for rent and $4,800 [2006 - $4,800] for administration at the exchangeamount. The rental income is netted against rent/lease expense and theadministrative income is included in interest and other revenue.2007 2006$ $Accounts payable 147,017 180,560Accrued professional fees 66,160 55,018Accrued vacation pay 78,530 78,311Accrued retirement benefits 29,678 61,220GST payable 20,541 39,742341,926 414,851

notes to fi nancial statementsDecember 31, 20077. BOARD MEMBERS’ REMUNERATION AND DISBURSEMENTSBoard members’ remuneration and disbursements consist of the following:2007 2006Annualstipend andDays per diem Expenses Total Total$ $ $ $District 1 [chairman] 114.5 38,390 23,920 62,310 69,480District 2 [executive] 48.5 14,100 7,250 21,350 27,869District 3 [executive] [a] 62.0 13,754 18,795 32,549 41,237District 4 [vice-chairman] 100.0 26,600 17,323 43,923 35,118District 5 [executive] [b] 71.5 17,515 8,395 25,910 21,197District 6 29.5 5,900 6,957 12,857 6,988District 7 28.5 5,700 3,803 9,503 5,606District 8 7.5 1,500 3,764 5,264 4,515District 9 10.5 2,100 1,372 3,472 6,929District 10 31.5 6,300 3,959 10,259 10,775District 11 34.5 6,900 5,907 12,807 7,278District 12 9.0 1,800 1,486 3,286 945District 13 15.5 3,100 1,446 4,546 1,351District 15 36.0 7,200 10,478 17,678 7,410599.0 150,859 114,855 265,714 246,698[a] Executive from January 1 to April 4[b] Executive from April 5 to December 31The Board consists of thirteen directors and a chairman. The chairman’sremuneration is a combination of a $13,200 annual stipend, plus a perdiem. The per diem rate is $220. Director per diem rate is $200.8. SWINE RESEARCH AND DEVELOPMENT CORPORATIONThe vice-chairman receives an annual stipend of $6,600 and executivemembers receive an annual stipend of $4,400 in addition to per diems.The executive committee is comprised of the chairman, vice-chairmanand two executive members.Manitoba Pork Council 2007 Annual Report27The Swine Research and Development Corporation [“SRDC”] wasincorporated in 2006 and the Council is the sole shareholder. The SRDCis a not-for-profit, non-taxable organization and its undertakings arelimited to providing or facilitating research or development initiatives ofbenefit to the breeding, raising or marketing of hogs, and to researching,investigating, gathering and distributing educational information onmatters of interest to hog producers. In the event that the SRDC shouldat any time be wound up or dissolved, the remaining property and/orassets of the SRDC, after payment of all debts and liabilities, shall bedistributed to the University of Manitoba, Faculty of Agricultural andFood Sciences for use in research relating to hogs by the Department ofAnimal Science. In 2005 and prior years, this entity was a consortiumwhich had been established by the Council, the Government of Manitoba,and the University of Manitoba, Faculty of Agricultural and Food Sciences.The operations were wound up on March 31, 2007 and the SRDC is in theprocess of settling its net assets.In the current year, the Council contributed $17,600 [2006 - $75,000]to the SRDC. At December 31, 2007, there was a balance of $49,996owing from SRDC to the Council. This amount is included in the Council’saccounts receivable.The SRDC has not been consolidated in the Council’s financial statements.Financial summaries of this unconsolidated entity as at December 31 andfor the years then ended are as follows:2007 2006$ $Financial positionTotal assets 63,484 18,670Total liabilities 65,396 16,662Net assets (1,912) 2,008Results of operationsTotal revenue 99,649 232,325Total expenses 103,570 224,503Excess of revenue over expenses (3,921) 7,822

notes to fi nancial statementsDecember 31, 20079. MANITOBA PORK CREDIT CORPORATIONManitoba Pork Credit Corporation [“MPCC”] was incorporated on July 24,2007 and has no authorized share capital.MPCC’s Board of Directors is the same as that of the Council. MPCC’sundertakings are limited to conducting programs to assist hog producersin the production of hogs in Manitoba, the marketing of such hogs, and instimulating, increasing and improving the economic well being of the hogindustry in Manitoba. In the event of the dissolution or wind-up of MPCC, theremaining property of MPCC, after payment of all debts and liabilities, shall bedistributed to the Council or a similar not for profit organization in Manitoba.At December 31, 2007, there was a balance of $27,381 owing from MPCC tothe Council. This amount is included in the Council’s accounts receivable.MPCC has not been consolidated in the Council’s financial statements.MPCC is not yet in operation and its financial statements at December 31,2007 and for the year then ended consist of a liability to the Council of$27,381 and start-up expenses of $27,381.Subsequent to year end, on January 31, 2008, MPCC opened a line ofcredit for $60,000,000 with the Steinbach Credit Union in order to deliverthe Advance Payments Program under the Agricultural Marketing ProgramAct of Canada to swine producers in Manitoba, Saskatchewan, Albertaand British Columbia. These advance payments are guaranteed in theirentirety by the federal government of Canada.10. NATIONAL CENTRE FOR LIVESTOCK AND THE ENVIRONMENT [“NCLE”]Manitoba Pork Council 2007 Annual Report28In 2003, the Council agreed to provide $750,000 over three years to NCLEand the related interpretive centre, Glenlea Farm Education Centre andcontributed $300,000. Due to the U.S. trade challenge initiated by the U.S.pork industry in 2004, the Council suspended contribution of its $225,000pledge for the 2004 year. In 2005, the Council was able to fulfill the 200411. UNIVERSITY OF MANITOBA ANIMAL SCIENCE DEPARTMENTIn 2005, the Council agreed to provide a minimum of $100,000 eachyear for three years to the University of Manitoba Animal ScienceDepartment. The agreement states that, in the event the Councildoes not possess the necessary funds to meet the obligation, the12. PENSION COSTS AND OBLIGATIONSEmployees of the Council are provided pension benefits by the CivilService Superannuation Fund [the “Fund”]. Under paragraph 6 ofthe Civil Service Superannuation Act, the Council is described as acontribution of $225,000. The remaining $225,000 balance of the totalcommitment was fulfilled in 2006.In 2006, the Council agreed to provide a further $600,000, in the amountof $200,000 per year commencing in 2007, to fund the Glenlea FarmEducation Centre.contribution may be deferred to a later year. In the current year, theCouncil contributed $150,000 [2006 - $150,000] which is included inswine production research expenses.“matching employer” and its contribution toward the pension benefits islimited to matching the employees’ contributions to the Fund. The costfor the year was $48,333 [2006 - $40,794].13. COMMITMENTSThe Council is committed, under operating leases, to future aggregatelease payments estimated to be as follows:$2008 73,0002009 22,00095,000The Council is currently negotiating a renewal of its premises lease foran additional five years to 2014. Current premises lease commitmentswhich are included above are $62,000 per year to March 2009.14. FUTURE ACCOUNTING POLICY CHANGESThe CICA has issued two new standards, CICA Handbook Section 3862:Financial Instruments – Disclosure and CICA Handbook Section 3863:Financial Instruments – Presentation, which enhance the abilities of usersof financial statements to evaluate the significance of financial instrumentsto an entity, related exposures and the management of these risks.The CICA has also issued a new accounting standard, CICA HandbookSection 1535: Capital Disclosures, which request the disclosure ofqualitative and quantitative information that enables users of financialstatements to evaluate the entity’s objectives, policies and processes formanaging capital.These changes in accounting policies, which will be adopted effectiveJanuary 1, 2008, will only require additional disclosures in the financialstatements.

the end

Manitoba Pork Council 2007 Annual Report28 Terracon PlaceWinnipeg, MB R2J 4G7 CanadaPhone: (204) 237-7447Fax: (204) 237-9831Email: general@manitobapork.com©Printed in CanadaMarch 2008 Manitoba Pork CouncilPrinted with vegetable-based inkson paper that is RainforestAlliance Endorsed,Acid Free, ECF-elemental chlorine freeand 20% total recycled content(pre-consumer waste).www.manitobapork.com