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New Pricing Convention in Quebec
Created on May 01, 2019


May 1, 2019 - On April 30, 2019 the Regie des Marchés Agricoles issued a ruling setting out how Quebec hogs sold to Quebec packers will be priced over the next three years. This new agreement applies retroactively to February 6, 2019. 

The agreement includes a $2/ckg premium for all animals. This price reflects the fact that Quebec hogs are certified Ractopamine free, are compliant with the Canadian Quality Assurance (CQA) program and will be compliant with the Canadian Pork Excellence (CPE) program. 

The price formula includes a reference to the USDA wholesale pork cutout price (F0B Plant, Report Code: LMPK602). For example, if the net cost of the US Hog price for the prior two days is less than 90% or more than 100% of the pork carcass cutout price for the same days of publication, the formula price will be adjusted by the difference between the hog price and the threshold amount. 

Packers will also have the right to apply penalties to animals that are not tattooed, have full stomachs or are excessively dirty. The discounts would be based on a percentage of animal value as follows: 

Criteria

Discount

No Tattoo

40% of value

Full Stomachs

50% of value

Excessively Dirty

30% of value


In order to be charged the discounts, farmers will need to receive a notice of non-compliance from a packer, have a meeting with the packer and board and not remedy the issue within 60 days.

 These changes only affect the agreements for Quebec hogs sold to Quebec plants and do not apply to Ontario hogs sold into Quebec.


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