Canada hog farmers selling barns as losses mount

Tue Jul 28, 2009 1:50pm EDT
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By Rod Nickel

WINNIPEG, Manitoba (Reuters) - Canada's hog industry faces its biggest crisis in 60 years, forcing many farmers to cut their losses by selling their herds -- if they can sell them at all.

The industry is reeling from high feed prices, a buoyant Canadian dollar, smaller exports to the United States and a disastrous association with the H1N1 flu outbreak that has closed some export markets.

"I'm living on borrowed time," said Bill Vaags, who started raising pigs in 1964 and was once one of the largest pig producers in the western province of Manitoba. His 1,200-sow operation is one-third smaller than it was two years ago.

Without substantial government aid, Vaags said he'll likely sell his Dugald, Manitoba hog operation by fall.

Getting out isn't easy, though.

"There's guys who want to get out but they're not prepared to sell their barns for 25 cents on the dollar," said Andrew Dickson, general manager of the Manitoba Pork Council. "There are people prepared to buy but they say it's a high risk."

Canada has lost about 1,000 hog farmers, or 11 percent, in the past year, Dickson said. The sow herd has fallen 13 percent over three years.

On paper, hog operations once worth millions of dollars are now worthless in the banks' eyes after years of losses, with farmers now losing about C$30 ($27.78) for every pig they market.   Continued...