November 20, 2007

 

Canada's hog, cattle sectors seek government help on rising dollar, higher feed costs

 

 

Several livestock groups in Saskatchewan province, Canada have appealed to the government in the light of rising Canadian dollar and high feed prices which have been detrimental to farmers.

 

The Saskatchewan Cattle Feeders Association, the Saskatchewan Stock Growers Association and the Saskatchewan Pork Development Board have joined forces in an effort to encourage government to provide assistance to cattle and hog operations facing a cost price squeeze.

 

The Canadian dollar has increased by roughly 23 percent against the US dollar since March. A 12 to 15 dollar per hog increase in feed costs has reduced returns to pork producers by about 40 dollars per head.

 

Sask Pork general Manager Neil Ketilson suggests that government intervention is needed if things are working beyond the farmers' control.

 

Though there is an existing farm safety net programme called the CAIS (Canadian Agricultural Income Stabilization), Ketilson said it is not as effective and transparent as it should be.

 

He stressed that the industry needs some "renewed emphasis and action to get payments into people's hands a lot quicker than what it is."

 

Ketilson is also looking for a short term cash injection through a loan programme that would be repaid once the industry returns to profitability.

 

In 1998 and 2001, the industry had a programme which gave producers the difference between the long term average prices, about C$140, compared to current market prices.

 

Ketilson said farmers would be eligible for a loan on the difference.

 

That loan would then be put back into their operation and it would build over time of course and then it would be ratcheted back once we get profitable times again, he said.

 

Ketilson notes, because the loans would be repaid over time, the program should not be countervailable.