2007 Annual Report - Manitoba Pork Council

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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
Page 1 and 2: Manitoba Pork Council2007 Annual Re
Page 3: table of contentsTable of ContentsC
Page 7 and 8: delegates 2007/delegates serving on
Page 9 and 10: oard of directors/manitoba pork cou
Page 11 and 12: manitoba initiativesProducer & Indu
Page 13 and 14: manitoba initiativesCommunity Relat
Page 15 and 16: manitoba initiativesResearch & Envi
Page 17 and 18: national initiativesPork Marketing
Page 19 and 20: fi nancial statementsManitoba Pork
Page 21 and 22: alance sheetAs at December 31Balanc
Page 23 and 24: statement of revenue and expensesYe
Page 25 and 26: schedule of administration expenses
Page 27 and 28: notes to fi nancial statementsDecem
Page 29 and 30: notes to fi nancial statementsDecem
Page 31 and 32: the end

2007 Annual Report - Manitoba Pork Council

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