Canada's new hog and pork support program, aimed at downsizing the country's hog herd and encouraging new pork marketing programs, is still in the process of being worked out, but the aim is to drop the output of hogs significantly.
"Part of the program's goal is to see the production of hogs in Canada drop down to the 25 million- to 26 million-head per year level," said Martin Rice, executive director with the Canadian Pork Council in Ottawa.
Canada's annual hog production for 2009 has been projected at 29 million head, while in 2008 production was 31 million. During 2007, Canada's hog production hit the 33 million-head level, he said.
Get out of the business
Rice said the aim of the program was to allow all sectors of the hog industry a chance to get out of the business if so desired. A previous program by the federal government was aimed solely at culling sows.
"The Canadian Pork Council, Agriculture (and Agri-Food) Canada and the government of Canada were still working out all the necessary details," Rice acknowledged.
The newest program, outlined by Agriculture Minister Gerry Ritz on Aug. 14, has three components:
• a $17 million pork marketing fund, to be administered by Canada Pork International to encourage expanded pork exports in order to offset pork markets lost due to H1N1 or disrupted due to U.S. country-of-origin labelling (COOL);
• government-backed long-term loans to hog producers who can provide "credible business plans" to lending authorities, in order for farmers to repay federal advance payments, address liquidity issues or make long-term investments toward profitability; and
• a $75 million hog farm transition program to help producers who wish to leave hog production and commit to stay out for at least three years.
Rice said the program was announced to provide creditors notice that financial help for hog producers had been initiated. The jury is still out on whether the new program will have the desired effect or not, according to industry sources.
"Essentially, the details of the program have not been released, which makes it hard to determine the exact impact the program will have," said Perry Mohr, CEO of Manitoba Pork Marketing.
Mohr speculated one of the least profitable sectors has been the farrow-to-wean operations, particularly the ones that have been selling weanling pigs into the US for the last 10 years.