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Hog programs aim to cut output to 25M head

(Resource News International) –– More details about Canada’s hog programs aimed at cutting annual production down to the 25 million to 26 million head per year level have made available, according to an industry official.

Canada’s annual hog production for calendar year 2009 has been projected at 29 million head, while in 2008 production was 31 million. During calendar year 2007, Canada’s hog production hit the 33 million-head level.

The aim of the various programs is to allow all sectors of Canada’s hog industry a chance to get out of the business, said Gary Stordy, public relations manager for the Canadian Pork Council in Ottawa.

The program initially outlined by federal Agriculture Minister Gerry Ritz on Aug. 14 had three components.

First: a $17 million pork marketing fund that will be administered by Canada Pork International to encourage expanded pork exports in order to offset pork markets lost due to H1N1 flu virus. It is also aimed at offsetting lost sales due to trade disruptions, such as the U.S. country-of-origin labelling (COOL) requirement.

The second component offered government-backed long-term loans to hog producers who can provide “credible business plans” to lending authorities. The loans would first be used to repay any advances under the Advance Payment Program. After that, the monies will be used to address liquidity issues or make long-term investments to make the operations profitable.

“We do know that a number of financial institutions have been more willing to provide hog producers with necessary funding upon presentation of the business plan,” Stordy said. “Producers who have not done so, are being encouraged to get in touch with the managers of their lending institutions and present their business plan.”

The third component was the hog farm transition program, which will see $75 million allocated to help producers who wish to leave hog production. The producers would need to keep out of the hog business for three years. They would negotiate the payment and time line for the program with program authorities which would consider impact on the orderly flow of animals to the market.

Applicants are now being accepted for participation in the hog farm transition program, Stordy said.

Participants in the transition program will submit closed-tender bids for how much money they would require from the program to completely idle all of their hog production facilities for three years following emptying of all barns. 

Producers must first register with the program to be eligible to participate in the tender process. Upon approval of registration, a bid form will be sent to the producer by the program administrator. Completed bid forms will need to be returned to the program administrator before the deadline established for each tender.

The first tender will occur on Oct. 28, Stordy said. All bids received by 2 p.m. EDT on that day will be considered for that date’s tender.

Subsequent tenders will be held until the $75 million in program funds have been exhausted or the program terminated, he said.

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