October 12, 2009

The Canadian government's programme aimed at reducing hog production is coming into clearer focus, an industry official said Friday (October 9).

 

Canada's annual hog production for calendar year 2009 has been projected at 29 million head. The aim of the government programme is reduce hog production to 25 million to 26 million head per year and allow all sectors of Canada's hog industry a chance to get out of the business, said Gary Stordy, public relations manager for the Canadian Pork Council.

 

The government programme, initially announced Aug. 14, had three components.

 

The first component was a C$17 million (US$16.30 million) pork marketing fund that will be administered by Canada Pork International to encourage expanded pork exports in order to offset pork markets lost due to AH1N1 flu virus, which was initially called swine flu. The fund is also aimed at offsetting lost sales due to trade disruptions.

 

The second component offered government-backed long term loans to hog producers who can provide "credible business plans" to lending authorities. The loans would first be used to repay any advances under the advance payment programme. After that the monies will be used to address liquidity issues or make long-term investments to make the operations profitable.

 

"We do know that a number of financial institutions have been more willing to provide hog producers with necessary funding upon presentation of the business plan," Stordy said. "Producers who have not done so, are being encouraged to get in touch with the managers of their lending institutions and present their business plan."

 

The third component was the hog farm transition programme, which will see C$75 million allocated to help producers who wish to leave hog production. To qualify, producers would need to keep out of the hog business for three years. They would negotiate the payment and time line for the programme with programme authorities that would consider impact on the orderly flow of animals to the market.

 

Stordy said applicants were now being accepted for participation in the hog farm transition programme.

 

He said participants in the transition programme will submit closed tender bids for how much money they would require from the programme to completely idle all of their hog production facilities for three years following emptying of all barns.

 

Producers must first register with the programme to be eligible to participate in the tender process.

 

Stordy said the first tender will occur on Oct. 28. All bids received by 2 p.m. EDT on that day will be considered for that date's tender.

 

Subsequent tenders will be held until C$75 million in funds for the programme have been exhausted or the programme terminated, he said.

 

US$1 = C$1.04 (Oct 12)