Big Sky Farms, the largest hog production company in Saskatchewan, has applied for creditor protection, according to Saskatchewan media.
The Humboldt, Sask. company cited an unprecedented downturn in North America’s markets for pork, Canadian Press said Nov. 11.
CBC quoted Big Sky CEO Casey Smit as saying in a news release that “while today’s actions are difficult, they will, in the long term serve the varied interests of our many stakeholders, including our dedicated employees, by making the company healthier overall.”
Smit was also quoted as saying the company will continue normal operations while under creditor protection. Big Sky runs about 40 hog facilities in Saskatchewan and Manitoba and employs over 400 people.
Big Sky was incorporated in 1995, having evolved from founder Florian Possberg’s construction of a lone 60-sow farrow-to-finish barn in 1975.
The company was planning in 2005 to enter the pork-packing business, working with Quebec packer Olymel and hog production firm Hytek on plans for a major kill-and-cut plant in Winnipeg, but the project was dropped due to vocal opposition.
More recently, the rising loonie and trade barriers such as mandatory country-of-origin labelling (COOL) in the U. S. have hindered pork-marketing efforts.
“Not only is Big Sky the largest pork producer in Saskatchewan, it’s the second largest in all of Canada. So you know, it really underlines… the challenges our industry has,” CBC quoted Possberg as saying Wednesday. Possberg is no longer involved in the company.
Saskatchewan taxpayers have also invested heavily in Big Sky. CBC on Wednesday quoted provincial officials as confirming the province’s equity is at risk.
Investment Saskatchewan, one Crown investor, warned in its second-quarter report in late August that the hog firm’s “future results will be significantly impacted by the ability of the company to raise capital and the direction of commodity prices, foreign exchange and input costs.”
Investment Saskatchewan’s stake, worth just over $22 million in shares and subordinated debt at the end of 2008, was worth $9.32 million at the end of June this year following a $10.29-million writedown.
Crown Investments Corp., another provincial investment agency, put $15 million into Big Sky’s expansion efforts in 2000.