November 5, 2012

Affected by the worst US drought, Canada's biggest hog producer, HyLife, is enduring severe losses, but fears losing part of its pig supply as buyers line up for other distressed farms.

While rival Canadian hog producers Big Sky Farms and Puratone Corporation entered receivership and creditor protection respectively this autumn, HyLife has maintained its hog production and kept its Neepawa, Manitoba processing plant running at expanded capacity, said HyLife Chief Operating Officer Claude Vielfaure on Thursday (Nov 1).

Like the rest of the industry, Hylife has absorbed losses as high as CAD50 (US$50.1) per pig it produces, due mainly to sharply higher feed grain costs after the worst US drought in 56 years. But the company has survived and is not contemplating a sale, as its processing, genetics, transportation and feed businesses smooth out losses from pig production, Vielfaure said.

"We do a lot of the stuff that helps reduce the cost of production to our company," he said in an interview with Reuters from the head office in La Broquerie, Manitoba. "It certainly balances out your revenue."

On Wednesday (Oct 31), Canadian hog producer and processor Maple Leaf Foods took a CAD13 million (US$13.1 million) charge on the declining value of its hogs and poultry. Canada is the world's third-largest pork exporter, with its top markets in the US, Japan and Russia.