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High Construction Costs Limit Interest in New Swine Barn Construction

By Bruce Cochrane

The chair of Sask Pork says high construction costs are limiting interest in expanding Saskatchewan hog numbers.

North American pork producers recorded record profits this spring and summer and although live hog prices have softened since mid-July producers are expected to remain profitable well into 2015.

Florian Possberg, the chair of the Saskatchewan Pork Development Board, says with western Canada's pork processors looking to access more hogs to meet capacity there is interest in increasing hog numbers in Saskatchewan but the cost of building new facilities is a limiting factor.

Florian Possberg-Saskatchewan Pork Development Board:
It's fair to say that some of the producers are looking at some of the possibilities.
First of all there is some empty capacity in Saskatchewan.

There's interest in filling that up and we've seen some of that this summer already where existing sow barns and nursery and finishing spaces have started to fill up that were empty for a period of time.

There is still some of that capacity out there to fill existing units that are currently empty.

If we're going to build greenfield projects, new barns, we need to realize that the cost of building new facilities has escalated rather significantly since the last units were built back in 2005-2006, that time period so it's going to take a bit of real confidence boost to get to the point where we're looking at significant greenfield expansion.

Possberg says at this point there's still not a real appetite from producers to make the major investments but obviously if profitability continues, that will grow.

Source: Farmscape

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