Canada's biggest hog farm weathers crisis, eyes supply risk

Thu Nov 1, 2012 1:38pm EDT
 
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By Rod Nickel

WINNIPEG, Manitoba (Reuters) - Canada's biggest hog producer, privately held HyLife, is weathering the industry's severe losses inflicted by the U.S. drought, but fears losing part of its pig supply as buyers line up for other distressed farms, the company's chief operating officer said on Thursday.

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 COO Claude Vielfaure.

Like the rest of the industry, Hylife has absorbed losses as high as C$50 ($50) per pig it produces, due mainly to sharply higher feed grain costs after the worst U.S. 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, Canadian hog producer and processor Maple Leaf Foods took a C$13 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 United States, Japan and Russia.

CONCERNED ABOUT SUPPLIES   Continued...