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NPPC: Canadian bail out hurts US pork industry

An emergency government subsidy programme for the Canadian pork industry proposed by the Canadian Pork Council would (CPC) have a 'lethal impact' on US pork producers, according to the country's National Pork Producers Council (NPPC).

In an press release, the NPPC explained that the CPC has asked the Canadian government to pump US$800 million into the country's pork industry.


The key component of the programme is a loan to pork producers – to be repaid over 10-15 years – of $30 for each market hog. A second component would provide $500 for each sow culled plus the market value of the animal.


Artificial

The press release goes on, saying that the proposal would artificially prop up Canadian pork production.


According to Iowa State University economist Dermot Hayes, US live hog prices would be approximately 7% lower than otherwise would have been the case.


Lethal impact

“Such a subsidy programme would have a lethal impact on US pork producers,” said NPPC president Don Butler. “NPPC is extremely concerned about such a programme, which will shift financial pain to US producers, who already have lost an average of more than $21 per hog since October 2007.”


Butler pointed out that while the programme is described as a 'loan', it is unlikely that commercial banks would make unsecured, subordinate loans to Canadian pork producers at a time when they are losing money. “The programme is really a cash bailout,” he said.


“NPPC is keeping all options open to address this issue,” said Butler.


Related websites:

Canadian Pork Council (CPC-CCP)
National Pork Producers Council (NPPC)
Iowa State University

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