One of Manitoba's largest hog producers, Puratone Corp., may have filed for creditor protection last week, but isn't the only one feeling the pain.
At least a dozen grain producers in Manitoba who delivered grain to Puratone Corp. prior to Sept. 12 that have yet to be paid, said Doug Chorney, president of Keystone Agricultural Producers (KAP), the province's general farm group.
"Since last Friday, about a dozen farmers contacted me directly and between them there's about $1 million in grain that's been bought and not paid for," he said. "And you can imagine how many more farmers there are that I haven't talked to."
Puratone filed for protection on Sept. 13 and is protected from creditors for the 30 days following. Because of this, Manitoba farmers who have yet to be paid cannot collect their money, or their grain.
Chorney said the irony in the story is that Puratone is now buying feed grain faster than ever, wiring the money straight to producers and paying a premium.
"This is very frustrating for producers that have not been paid and we need to look at how we can help these farmers get their money," he said. "Somebody's got money here and these guys are out all of their grain."
This could only be the beginning of the problem. Hog producers across the province are facing the same troubles as Puratone and are in need of loans to stay afloat this year.
The Manitoba Pork Council said a government loan of about $150 million would be needed to help the province's pork producers.
Chorney thinks the money would have to be provided through an AgriRcovery program, which would normally see 60 per cent of the funds come from the federal government and 40 per cent from the provincial government.
High feed prices have caused production costs to spark, and most producers are losing money, he said. Hog prices are also falling and producers have been losing between $20 and $50 per hog.
Meetings are expected to take place this week to discuss plans, but nothing had been set as of Tuesday morning, said Chorney, who farms at East Selkirk, Man.
There is also a task force working on the issue nationwide, with Rick Bergmann, vice-chairman of the Manitoba Pork Council, providing a voice for Manitoba, he said.
-- Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.