$75 million hog buyout wraps up
Wednesday, March 17, 2010
by BETTER FARMING STAFF
The fourth and final hog transition tender auction wrapped up last week with a price range lower than the preceding auction.
The buyout assigns funds to producers willing to set aside all hog production for at least three years through a competitive bidding process. Low bidders win and pledge to shut down hog production facilities for at least three years.
Held March 10, the final tender auction accepted 93 of 274 bids totalling $14,197,732. The committee in charge of the program had allocated $14 million to the final auction. The price range for the accepted tenders was $493.80 to $888.97 per animal unit equivalent, a formula that takes pigs of all sizes into account. The price range for the third auction’s tenders was $584 to $999.86 — higher than the first ($300 to 997) and with a significantly higher amount for the low bid than the second ($370 to $1,034.23).
Final numbers won’t be released until the end of April. Catherine Scovil, associate executive director of the Canadian Pork Council, responsible for administering the $75 million federal buyout, says producers with successful bids have until April 15 to confirm that they will participate.
In the meantime, the Council will consider an earlier release of some preliminary numbers, such as the number of sows and the provincial breakdowns.
“We don’t know how many people from this tender will confirm their participation,” says Scovil.
If previous auctions are an indication, however, it’s not likely the preliminary numbers will change much from final figures, she adds.
In total, the program accepted 428 bids of 1,407 submitted and spent nearly $74.5 million of federal funds.
After three auctions, more producers from Ontario than from any other province had agreed to quit the industry. According to an earlier report, 161 bids totaling $21,758,335.32 were awarded to Ontario producers. Manitoba had the next highest number of bids, 59, for a total of $14,011,021.92. British Columbia had the fewest bids – 10 – but Quebec had the fewest animals taken out of production.
Quebec producers also received the least amount of money from the buyout program: $3,570,003.51. Quebec produces as many hogs or more than Ontario, but has a more lucrative provincial stabilization program. BF