Canadian hog industry seeks government rescue

Mon Jul 6, 2009 5:12pm EDT
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By Rod Nickel

SASKATOON, Saskatchewan (Reuters) - Canada's struggling hog industry has asked the federal government for C$800 million ($690 million) a year in aid to help rescue it from its worst downturn in decades, as prices tumble and export markets close their doors due to the H1N1 flu outbreak.

Hog farmers will need the extra help just to meet drastically reduced industry targets over the next five years, the Canadian Pork Council said on Monday, after presenting its plan to Agriculture Minister Gerry Ritz last week.

The council is asking for federal loans of C$30 per hog to ease the sting of lower prices, as well as aid for farmers looking to get out of the hog business.

At present, farmers are selling slaughter-weight pigs for between C$120 and C$140 each, generating a significant loss, given costs of C$160 to C$180, said Stephen Moffett, a hog farmer in the eastern province of New Brunswick and an official with the Pork Council.

"If nothing is announced very very soon, we see a tremendous amount of loss of production," Moffett said.

"We don't want to see catastrophic losses. If the industry is going to downsize, which it already is, let's control it a bit. Let's try to make sure we don't lose so much in any one region that you start to lose abattoirs (and) feed mills."

The five-year loan program could be worth C$800 million annually, Moffett estimated, based on slaughter rates.

The Pork Council had initially asked the government for an outright payment per hog, but Ottawa is sensitive to trade complaints over subsidies, Moffett said. Loans would at least help farmers find credit that has become scarce since the start of the recession, he said.   Continued...

<p>Baby pigs in their pen on a small farm outside of Calgary, Alberta, April 2, 2009. REUTERS/Todd Korol</p>