Alternative Hog Pricing Mechanisms Effective During US Shutdown24 October 2013
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CANADA - Alternative hog pricing methods used by the pork industry to price hogs during the suspension of some US government services appear to have been effective in ensuring producers were paid fairly, according ythe general manager of h@ms Marketing Services, writes Bruce Cochrane.
As a result of the partial US government shutdown the US Department of Agriculture's tracking of hog pricing information used by industry to establish daily live hog prices were suspended for just over two weeks.
H@ms Marketing Services general manager Perry Mohr likens the situation to driving with a broken gas gauge.
Perry Mohr-h@ms Marketing Services
I would suggest that virtually every major Canadian processor uses pricing information from the United States to establish hog prices and some of the smaller plants utilize the pricing information from some of the larger plants with some regional differentials based on freight and some other factors.
Over all I believe that, as information trickles out today, that the methods that were adapted appear to have paid producers fairly over that period of time.
Knowing the actual cost to the North American industry, we may not actually ever know because the USDA is not going to go back and retroactively report the prices that were paid throughout that period of time so to actually put a number on it is virtually impossible.
Again, I believe while not ideal and while I think we can fine tune in the future how hog prices are paid in the event that this happens again, I do believe for the most part that hog producers were paid fairly throughout that period of time.
Mr Mohr suggests, in the future, the industry may respond by becoming more proactive in establishing within the terms and conditions of a contract what kind of pricing mechanism will be used in the event this situation is repeated.
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