Hog Industry Restructuring Support Welcomed by the CFA

August 15, 2009 - The Canadian Federation of Agriculture welcomes the long-awaited and much needed Government of Canada announcement which details a restructuring program for Canadian hog producers. However, in light of current market conditions, the CFA cautions the dire situation facing the pork industry is still a long way from being completely resolved and remains committed to working closely with the Canadian Pork Council (CPC) and Agriculture and Agri-Food Canada in the coming months as the initiatives are implemented.

“The programs announced today are good news for hog farmers,” said Canadian Federation of Agriculture President Laurent Pellerin. “The pork sector’s impact on the economy is significant and Canada cannot afford to risk losing this vital industry. We are encouraged the government recognizes that investing in and assisting this sector now will allow for greater returns in the future.”

The programs announced on August 15 include:

•           An International Pork Marketing Fund that will provide $17 million in funding to Canada Pork International in order to enhance market research, promote Canadian pork products, address pork export losses, and build a strong foundation for the future of the industry.

•           Viable hog operations will be able to access long-term loans with government-backed credit from financial institutions to restructure their businesses.

•           The Hog Farm Transition Program will provide up to $75 million to help producers who wish to transition out of the industry.

The last three years have seen an unrelenting wave of losses for farmers. High input costs, a strong Canadian dollar, low hog prices, the economic crisis reducing access to credit, and Country of Origin Labeling have, over the years, undermined Canadian pork producers. The onslaught of negative consumer perceptions around H1N1 Influenza A has added to the Canadian pork industry’s situation as it has softened consumer demand and caused market disruptions. Recent statistics indicate that exports of live animals in June 2009 was 34.1 per cent lower than June 2008. Live animal export was $402 million lower between January and June 2009 compared to same period last year, according to Statistics Canada.

“While these programs will go a long way in providing much need immediate assistance for many struggling hog producers, we need to keep in mind that the pork industry is unfortunately not out of the woods yet,” said Pellerin. “We encourage the government to ensure the application and administration details are available to producers as quickly as possible.”

CFA commends the pork industry for the steps taken to date in trying to streamline and reposition their industry. The CFA encourages Canadian consumers to continue to support Canadian producers by buying Canadian products and in particular, Canadian pork.