Canada aims to cut hog production to 25 million heads per year

 

 

Details of Canada's new programme aimed at downsizing the country's hog herd and encouraging pork marketing are still being worked out, but industry representatives said reducing hog output by several million head per year is one of the goals.

 

"Part of the programme's goal is to see the production of hogs in Canada drop down to the 25 million to 26 million head per year level," said Martin Rice, executive director of the Canadian Pork Council.

 

Canada's annual hog production for calendar year 2009 has been projected at 29 million head, while in 2008 production was 31 million. During calendar year 2007, Canada's hog production hit the 33 million mark, he said.

 

Rice said the aim of the new programme, announced Aug. 14, was to allow all sectors of the hog industry a chance to get out of the business if so desired. This move follows a previous government programme that was aimed at culling sows in an effort to reduce the size of the breeding herd.

 

"The Canadian Pork Council, Agriculture Canada and the government of Canada were still working out all the necessary details," Rice acknowledged.

 

The new programme has 3 components.

 

First, it establishes a C$17 million (US$15.77 million) marketing fund to encourage expanded pork exports to offset sales lost due to the AH1N1 flu virus and other trade disruptions.

 

The second component offers 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 received and after that could be used to address liquidity issues or make long-term investments to improve profitability.

 

The third component is a transition programme which allocates C$75 million (US$69.62 million) to help producers who wish to exit the hog production industry. Those participating in the transition programme would have to stay out of the pork business for three years.

 

The jury is still out on whether the new programme will have the desired effect, according to industry representatives.

 

"Essentially, the details of the programme have not been released, which makes it hard to determine the exact impact the programme will have," said Perry Mohr, chief executive of Manitoba Pork Marketing.

 

Mohr speculated one of the least profitable sectors has been the farrow-to-wean operations, particularly the ones that have been selling weanling pigs into the US for the last 10 years.

 

"Absolutely, there will be less pigs produced in Manitoba given that Manitoba is the biggest exporter of weanling hogs into the US," Mohr said. "If I was in the weanling pig business, and I knew what I do today, I would be the first in line for that C$75 million."

 

US$1= C$1.07 (August 25)