Ontario tops in pork buyout program

by BETTER FARMING STAFF

A Canadian Pork Council report shows that, after two rounds, Ontario hog producers are receiving the largest share of the national hog farm transition program funds – so far, with nearly as many producers pledging to get out of the business as from the rest of the provinces combined.

Released today, the report shows that Ontario producers had 92 bids accepted under the program for a total bid value of $11,078,616.85. Here’s a provincial breakdown of total money received and the number of bids:

Ontario - $11,078,616.85; 92 bids

Manitoba - $10,477,166.63; 32 bids

Alberta - $4,681,427.97; 28 bids

British Columbia - $3,504,487.60; 7 bids

Saskatchewan - $3,321,932.63; 5 bids

Quebec - $2,460,399.34; 19 bids

Atlantic Region - $708,471.67; 9 bids

The report follows the Council’s Monday announcement of the Dec. 9 tender auction results. The Council administers the federal program.

The auction awarded 115 of 469 bids submitted from across Canada a total of $24,504,418.15.

Bids averaged $872.91 per animal unit equivalent and ranged from $370-$1,034.23 per equivalent. Those figures are up significantly from the Nov. 4 auction’s final numbers of $767.28 per equivalent and range of $300-$997 per equivalent. The equivalent is roughly the same as one animal in a farrow to finish operation, although not specifically a sow or weanling, says Council spokesman Gary Stordy.

The Dec. 9 auction was the second of four. The third auction takes place Jan. 20, 2010 and will allocate $25 million in tenders. The Council will release the date for the final auction in January.

According to figures released in the Monday announcement, the first two auctions combined have removed 65,959 sows, 145,133 weaner pigs (to 30 kilograms) and 184,557 hogs (from 31 kilograms to market weight) from Canadian production for the next three years. In Ontario, the numbers removed are: 18,811sows; 47,535 weaners; and 62,962 market hogs.

The $75 million federal buyout along with government-backed loans and a $17 million international pork marketing fund, were announced in August and are intended to help the ailing industry regain its footing. The export-focused industry has been hammered by persistent low prices, the introduction of country of origin labelling in the United States, the recession, a rising Canadian dollar and bad publicity connected to the H1N1 pandemic, often referred to by the media as ‘swine flu.’

The buyout assigns funds to producers willing to set aside all hog production for at least three years through a competitive bidding process. Producers pledge to shut down hog production facilities for at least three years.

Payments are made after barns are confirmed empty. BF

UPDATE

Wilma Jeffray, chair of Ontario Pork, is concerned the province’s hog industry has already reached a critical point in terms of meeting processors’ supply needs.

Through the buyout, Ontario has lost nearly 19,000 sows, the production base for about 500,000 market hogs annually. Jeffray says it’s not clear whether the sows lost in Ontario were producing early-wean pigs for the export market or market hogs.

She explains about 95,000 pigs per week are needed to supply Ontario’s hog processors: “We are to the point now that (Ontario) processing is looking at this and their primary hog supply is starting to evaporate and that puts their business at risk as well.”

“It’s a pretty vicious spiral,” Jeffray says.

The numbers associated with the buyout show “the impact of an unlevel playing field” between producers in Quebec and Ontario, she says. In April, Quebec had 28 per cent of the country’s sow herd. With such a large percentage it would be anticipated that a similar share of the province’s producers would have taken part in the transition program tenders. But so far, their share is only about six per cent. BF