Hog producers won’t be getting any additional government help.
Weeks of talks between Ottawa, the provinces, and producer representatives have ended with producers being told to make use of existing support programs.
“I was pretty disappointed to see that,” said Karl Kynoch, Manitoba Pork Council chairman. “This shows us that government is not taking the hog industry seriously.”
Producer organizations were asking for as much as $150 million in bridge financing to cope after the drought in the U.S. Midwest sent feed prices soaring. That caused prices to plunge as producers on both sides of the border emptied their barns. Manitoba, a major producer of weanlings was hit especially hard, as American demand for piglets dried up.
Market conditions are expected to improve in the spring, but that will be too late for many, said Kynoch. Both the province and Ottawa are urging hog farmers to tap their AgriInvest accounts for immediate assistance and request an AgriStability interim payment.
That doesn’t cut it, according to Kynoch.
“A couple of dollars a pig when you’re losing $30 to $50 really doesn’t do much,” he said, adding successive poor years mean some producers don’t have adequate reference margins to make use of the programs at all.
That’s exactly what hog farmers are telling Keystone Agricultural Producers.
“Producers that have been contacting us at KAP are saying these programs are not going to be adequate,” said KAP president Doug Chorney.
Manitoba Agriculture, Food and Rural Initiatives Minister Ron Kostyshyn said he will continue to work to find ways to support pork producers in the short term.
“We are in consultation with the Manitoba Pork Council and obviously with the financial institutions that are a part of this as well,” he said. “Somehow the partnership needs to develop and shed new light as we move forward.”
While acknowledging not every producer is in the same “breadbasket” when it comes to existing programs, Kostyshyn said farmers must look to them first.
“This is the opportunity for them to… harness these dollars,” he said.
Government is working with producer groups that deliver cash advances under the Advance Payments Program to ensure that applications are processed quickly, and Agriculture and Agri-Food Canada will adjust the Hog Industry Loan Loss Reserve Program to ensure greater flexibility in dealing with the current liquidity crisis.
Program terms have been adjusted, allowing lenders to extend interest-only payment periods. As well, a Hog Industry Task Team, which includes the Canadian Pork Council, pork processors and producers, will attempt to ensure producers are making “full use of existing programs.”
But unless the financial needs of distressed producers are met, many will exit the industry, said the head of the Canadian Pork Council.
“We need to have short-term actions now to maintain a critical mass of the industry and to continue to make a significant contribution to Canada’s economy,” said Jean-Guy Vincent.
If there is any silver lining to the decision, Kynoch said it’s that producers now know what to expect from government.
“That does allow a producer to make a decision… whether to shut down their barn, or to carry on and try to get through,” he said.
In 2011, Canada exported $3.6 billion worth of pork products and hogs to 140 different countries. In Manitoba, 13,000 jobs are tied to the pork industry.