Piecing together the agriculture puzzle.

Each year Saskatchewan Business Magazine analyzes the provincial agriculture sector, reporting on overall industry trends. Usually we try to cover as many sectors as possible, and in keeping with our philosophy of finding good news to report, we relay this information on to our readership. This year, however, because of unprecedented and extenuating circumstances facing the industry, we have chosen to take a more select route.

There's no denying the agriculture industry has been hard hit over recent years. What with the seemingly relentless drought, last year's grasshopper infiltration and, quite possibly the most damaging hardship, the BSE crisis, it appears as though there's many cards stacked against those in the agriculture sector. But that's not necessarily so, says Neil Ketilson, general manager with Sask Pork.

The industry has followed a path of strong and steady growth, having doubled production in the last 10 years, says Ketilson, adding that Saskatchewan producers marketed 2 million hogs in 2003. As such, the hog industry is experiencing year after year of record production and is thus contributing significantly to Saskatchewan's provincial economy.

"Like all commodity producers we see the ups and downs indicative of supply and demand cycles," Ketilson says. "But we're here for the long haul. Our growth in what many would consider a down cycle is a good indication of the overall potential of the pork industry."

Ketilson says that this growth is largely the result of changes in the grain transportation system, particularly the increased freight rates. Indeed, he notes, livestock producers have taken a negative situation and turned it into a positive one. For example, Ketilson points out that many of the 8,700 direct and indirect jobs created by the Saskatchewan hog industry are located in rural Saskatchewan, offering a stark contrast to the urban migration trend otherwise affecting rural Saskatchewan. It's estimated that these jobs create in excess of $290 million in wages and more than $80 million in taxes.

In addition, a 1,200-sow barn has a capital cost of $8 million, while a 5,000-sow barn has a capital cost in excess of $32 million. These capital costs have successfully attracted the attention of all types of investors, and in turn, create optimism, spurring further investment and continuing to create economic spinoffs.

The hog industry is extremely forward-thinking and progressive in other examples aside from the economic impact it creates. They have been integral and proactive in the initiatives under-taken by the Canadian Pork Council, namely the Canadian Quality Assurance Program (CQA[R]). The CQA[R] Program assures customers that the pork produced under the program in Canada, and Saskatchewan, is safe, wholesome and the best product possible. It does so by a very scientific and analytical process which includes detailed record-keeping, good production practices and following the guidelines of the HACCP (Hazard Analysis Critical Control Point). The HACCP is an internationally recognized, scientifically based method used in food processing plants ensuring food safety by reducing food safety risks at critical points in the production process.

With the CQA[R] program at the farm level and the pending implementation of a national pork traceability system, the hog industry will have successfully implemented a food tracing system from farm to fork.

Hog production and the shift to intensive livestock operations overall is a good example of rural diversification that has benefited Saskatchewan's agricultural sector.

Another way in which some ingenious agriculture producers have chosen to go is via a different diversification route--manufacturing. Indeed some of the province's most successful agricultural implement manufacturers, including Bourgault, Conserva Pak, Flexi-Coil, Morris and Schulte began as on-farm sidelines.

Today these companies, and many, many more who followed in their footsteps, have grown to become a multi-million dollar industry in Saskatchewan. In fact the impact of their manufacturing has grown far beyond the province's borders. Certainly, because of our proximity to the United States, the U.S. export market is an integral one to these manufacturers. But perhaps the next most important export market is Australia, which is further analyzed in the subsequent story entitled: Working the Land Down Under.

We encourage you to read on to learn of Saskatchewan's manufacturing prowess and how it has affected the Australian marketplace.