The chair of Manitoba Pork Council says it’s important that any government involvement in helping pork producers contend with the current downturn in profitability due to high feed costs and low hog prices is non-countervailable.
High feed costs fueled by limited availability of feed grains due to drought in the U.S. and low hog prices are being blamed for two of western Canada’s largest pork producers, Big Sky Farms and the Puratone Corporation, filing for bankruptcy protection.
Manitoba’s pork industry is expected to lose between 130 and 150 million dollars over the next six to eight months.
Manitoba Pork Council chair Karl Kynoch says we need to get government backed financing in place to bridge the cash crunch until producers can get back to profitability, possibly next summer.
One of the things that’s a challenge is a straight cash injection.
Stuff like that is countervailable so the governments will not come to the table with anything that would cause a trade case with the U.S.
What we need to look at is to deal with some of our challenges and that is just getting access to dollars.
Producers need cash to be able to pay for the feed to continue to feed the pigs and pay the wages of the people that are working for them.
Those are two of the immediate challenges is the access to cash and producers are very short of cash right now just due to the fact, the amount of money that they’ve lost the last three or four years has taken away the cushion for them to be able to deal with a downturn this severe.
We’re not actually asking for a direct cash injection but we need some support so that we can go and access this kind of cash until we can get to more profitable times.
Basically what we’re looking for is cash to bridge us to profitable times with a little bit of backing behind it.
With producers being strapped and their credit lines being run up it’s a challenge to have that access to cash.
Kynoch says getting government to the table and up to speed on the situation has been a challenge.
He says right now producers are wondering what to do and they’re looking for information on which to make good sound business decisions so we need to know what government involvement to expect sooner than later.
