Farm Credit Canada says is encouraging pork producers to maintain close contact with their lenders as they consider options for addressing an ongoing economic squeeze.
Canadian pork producers have been struggling through an extended downturn in profitability.
Farm Credit Canada senior vice-president portfolio and credit risk Remi Lemoine says the downturn has dragged on for well over two years fueled by high feed costs, issues with U.S. Country of Origin Labelling, the rising value of the Canadian dollar and, just when it looked like things were about to turn around, the H1N1 flu virus.
We’ve been keeping a close watch on the situation.
We’ve been in touch with our producers.
In these situations the best thing best thing to do is to stay in touch with your creditors whether it’s FCC or any other lending institution and other short term credit suppliers and let them know where things are and work with them to look at options to help stretch out some of the payment requirements and that sort of thing to stay liquid and get through the downturn.
We’re somewhat optimistic although it’s anybody’s guess.
We’re optimistic that in nine to 12 months that we’ll see things come back.
We’re watching closely the breeding herd population in the U.S.
When that generally goes down then supply goes down and supply and demand kicks in and hopefully that will drive the prices back up.
There’s still lots of unpredictable variables that we have to watch too.
The exchange rate has a big impact on our producers.
Lemoine says, as bad as things look, FCC is hopeful that by next spring the markets will have rebounded but the strength and sustainability of that rebound is hard to predict.
He acknowledges there are several variables like the exchange rate and feed prices and we’re still not sure if we’ve seen the full effect of Country of Origin Labelling but he remains hopeful.
Source: Farmscape.Ca
