Pork Council Fears Herd Cuts Too Sharp

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Canadian hog farmers have committed to slashing their herds by 5.6 per cent in exchange for government aid, but demand for the exit cash is so high that the Canadian Pork Council fears the industry may be shrinking too fast, a top official said Jan. 26.

A competitive bidding process for the funds so far has resulted in 335 farms agreeing to remove 104,531 sows, or 7.9 per cent of the national sow herd, and 660,541 total pigs (5.6 per cent of the Canadian herd) from production.

The Pork Council, which administers the program, on Jan. 25 reported the results of the third of four rounds to distribute the money.

Farmers must agree to halt hog production for three years in exchange for the funds.

The process has attracted three times more bids from farmers than it could approve, suggesting that many farmers may be ready to quit without government help.

“It’s a clear indication that our industry is under severe financial stress,” said Jurgen Preugschas, an Alberta hog farmer and president of the Canadian Pork Council. “We’re fearful that if things don’t turn around that our numbers are going to drop below that critical mass… to have a strong viable industry.”

The Pork Council has set a goal of reducing annual production by 18 per cent to 25.5 million pigs in 2014 from 2008 levels, but Preugschas said it may be moving faster than that.

A separate loans program delivered by private lenders, but backed by the Canadian government, isn’t approving loans as quickly as hoped, Preugschas said.

The Pork Council will award the final $14 million of the $75 million government fund on March 10.

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