US pork producer retirement program launched
According to swine industry analysts a 5-10% reduction in the US breeding herd needs to take place to facilitate a turn around in fortunes. In an attempt to get the US pork industry back on track, a group of pork producers has launched a Producer Retirement Program (PRP).
Iowan pork producer Chuck Wirtz, chair of the PRP, says the objective of the program is to give producers and their bankers a viable option for exiting the farrowing business or retiring specific farrowing units or operations.
“It's strictly voluntary,” Wirtz explains. “I don't have a clue what kind of participation we'll get. We've had quite a bit of good feedback from people on the subscription level. We don't have any idea on the bid side.”
20 dollars per sow
Producers voluntarily participating in the PRP will pay into program at 20 dollars per sow. The PRP will use membership payments to create a fund that will be used to help compensate producers for sows they elect to slaughter. PRP intends to have financial commitments of at least 50 million dollars before initiating the program. They plan to start taking bids later this summer.
“People want to become members and think the program is a great idea from the subscription standpoint,” he continued. “We'll see how many producers are at the stage in life where they want to retire.”
Wirtz says the group is asking allied industry to back the effort as well. Lender AgStar Financial Services is expressing support. “We've reached a point in the US swine industry over the past 20 months, that on-going losses have resulted in at least $3.5 billion of lost equity in the industry,” says Mark Greenwood, vice president-agri business capital for AgStar. “That trend just cannot be sustained.”
Participating members whose sow retirement bids are accepted will agree to designate specific facilities and not use those facilities for sow production for a two-year period.
• Producer retirement Program
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