Open letter to all Ontario pork producers (February 17, 2009)

February 17, 2009

To all Ontario pork producers:

I would like to provide an update on the work of the commission and the industry advisory committee to move the hog industry forward.

Our goal is to create a business environment in which Ontario's pork producers - large and small - can succeed. We are in no way trying to diminish the role that Ontario Pork plays in the industry. We are, however, committed to delivering on the changes that both industry members and Ontario Pork have publicly supported.

The county meetings that are wrapping up around the province provided producers and industry stakeholders with an opportunity to hear more about the future role of Ontario Pork. As you may know, Elmer Buchanan, Vice Chair of the Commission and Co-Chair of the Hog Industry Advisory Committee attended a number of these meetings, to share information and respond to questions.

What Elmer heard was that producers clearly recognize that the status quo is not acceptable. For some, the timelines and target dates for change seem too fast.

I want to assure you that hog marketing in Ontario will continue in an orderly way as this process moves forward. Some producers may want to make changes sooner than others. Those that want to continue with existing marketing methods and business relationships will still have that option. The whole idea is to provide producers with more options, not fewer.

We are moving toward a model that includes all producers. Just as the commission was inclusive in inviting all producers to participate in the July 2008 hearing, so we are being inclusive in the marketing model being put forward. The Commission's decision specifically spelled out that producers who wish to continue to market through Ontario Pork will still have that option.

Ontario Pork decided to separate the marketing from universal services, creating two organizations. The Commission did not direct Ontario Pork to separate itself into two organizations. The immediate focus should be on allowing transition and change to begin and to work on structural change in the future. Decisions like this can be made at a later time.

Tribunal appeals have been filed against last fall's Commission decision. The commission recognizes that some producers have appealed its decision to the Agriculture, Food and Rural Affairs Appeal Tribunal (AFRAAT) and that the implementation of the decision has been stayed. We intend to address the stay before AFRAAT in the near future. I understand that preliminary work on the appeal hearings will likely begin in early March and that Ontario Pork intends to participate in the process.

While the appeals process is ongoing, and we fully respect that process, there are several areas that we can continue to work on to make the transition as smooth as possible. We clarified as much to the board both in a face-face meeting and in writing.

We regret that Ontario Pork has withdrawn from the industry advisory committee. It is important that the industry's leaders work together for the betterment of the entire sector. We certainly hope that the board will rejoin us as we continue to work for producers in good faith in the coming weeks and months.

We need to continue the momentum for change. While there have been concerns around the timelines for implementing the Commission decision, the impetus for these changes actually came in the fall of 2006, with the board's strategic review. Markets - whether global or domestic - are changing at a rapid rate. Like other industries, the Ontario pork industry must keep up with the times in order to stay in business.

The advisory committee has reached a recommendation on the value of the fee that producers should pay to support the delivery of universal services by Ontario Pork. Fees of $0.80 per market hog, and $0.20 per weaner/feeder pig that are exported from Ontario are in line with support levels in other provinces and will provide a resource base for Ontario Pork to deliver services.

The Commission has also heard that a high priority for producers is financial protection against buyers who default on payments. The advisory committee has been working on this and has received a favourable response from the Ministry of Agriculture, Food and Rural Affairs to start developing a model to meet this need. We are committed to getting this right, with support from across the industry. After all, the long-term sustainability of industry is our first priority.

These are very challenging times for you as pork producers. You continue to stream-line your operations to maximize productivity and attempt to realize full value for any of your expense items. This process is no different. The outcome of this will be an effective and efficient structure focused on bringing marketing options and value to you as producers. It will also provide Ontario Pork the opportunity to refocus on the priorities identified by stakeholders as essential to being successful. We are interested in hearing from you as we move forward. Please forward your comments to: ontariofarm.productsmarketing@ontario.ca

Sincerely,

Geri Kamenz
Chair