Canada’s hog sector is weighing the risks and benefits of asking Ottawa for more funds to help money-losing farmers cease production, industry officials said Feb. 25.
Only one out of three farmer applications to the current $75-million government buyout pool has been successful.
Hog farmers have suffered from years of low prices, the reduction of live hog exports to the United States because of a U. S. meat-labelling law, and a strong Canadian dollar.
The biggest risk of increasing incentives for farmers to cease production for three years is that supplies may shrink so much that packers have to cut production, said Jurgen Preugschas, president of the Canadian Pork Council.
“Certainly some people are asking the question (about seeking more money),” said Preugschas, an Alberta hog farmer. “(But) they’re nervous that more of our infrastructure would collapse.”
Canada’s hog herd has shrunk to its lowest level in 12 years, falling 4.5 per cent year over year to 11.63 million head on Jan. 1. The exit program has so far committed $61 million to 335 farms that will remove 104,531 sows and 660,541 total pigs from production.
Canada’s biggest hog plants are owned by Maple Leaf Foods and Olymel.
The final $14 million will be distributed March 10.
If appl icat ions are high again, the industry should ask Ottawa for more money, said Karl Kynoch, a hog farmer and president of the Manitoba Pork Council.
“If (farmers) are forced to exit, we need to give them something to help them do that with a little bit of dignity and to clean up some of their commitments.”