How often of late have we heard the comment somewhere that ‘everything is better with bacon’.
The more pressing question might be whether we will be able to afford bacon in the future?
That might sound like a stretch, but the pork industry at present is under duress.
Big Sky Pork in Saskatchewan went through bankruptcy in the past, and it took a deal which saw many creditors, including farmers who sold grain to the large pork producer taking less than owed, to keep the barns open.
The bail-out in 2009 was enough to keep Big Sky afloat, but it appears that help wasn’t enough and Big Sky is once again in trouble financially.
Big Sky is deep in red ink. The company is said to be in debt to the tune of about $75 million.
So now Big Sky will go up for sale if the court approves.
With 400 employees, and the majority of Saskatchewan’s pork production what becomes of the company will have a great deal to do with whether pigs remain anything but a hobby aspect of farming in this province.
This time Big Sky is not alone.
Puratone, a major producer in Manitoba, announced recently it seeks court protection from creditors under the Companies’ Creditors Arrangement Act.
The straw to break the industry’s back is the current high grain prices, which stands to reason given that feed costs are the largest single input cost in producing pork.
This fall has certainly seen grain prices jump. Poor corn crops in the United States, and the new demand of ethanol production is squeezing corn going to livestock.
Barley crops in Canada haven’t exactly been bumper either, and that means higher feed prices here too.
The question is whether you believe grain prices are likely to decline enough over the long term to make large-scale pig barns viable. It seems rather unlikely given current trends and the new biofuel initiatives.
So the question then becomes how does pork production find profitability in a world of higher grain prices?
The answer is not easy but will be essential if we are to enjoy affordable bacon in the future.
Calvin Daniels is Assistant Editor of Yorkton This Week.