Pork Industry Profitability Stimulates Interest in Advance Payments13 September 2013
CANADA - The Manitoba Pork Credit Corporation reports higher hog prices and lower feed costs have stimulated an increased interest among western Canadian pork producers in the Advance Payments Programme, writes Bruce Cochrane.
The Advance Payments Programme is a federal loan guarantee programme that provides pork producers short term low interest operating funds based on the value of their inventory.
Randy Ozunko, the manager of the Advance Payments Programme with the Manitoba Pork Credit Corporation, observes as hog prices have gone up and feed costs have gone down interest in the programme has increased.
Randy Ozunko-Manitoba Pork Credit Corporation:
The Manitoba Pork Credit Corporation, we administer the programme on behalf of the federal government for all the western provinces, Manitoba, Saskatchewan, B.C. and Alberta.
To be eligible you have to be a pork producer, you have to be Canadian citizen or a corporation or cooperative or a partnership which the majority interest is held by Canadian citizens or permanent residents.
Under the Advance Payments Programme what happens is the federal government guarantees repayment of the cash advances that are issued to pork producers by Manitoba Pork Credit Corporation. Producers can get an advance of up to 400,000 dollars.
The first 100,000 dollars is interest free and the remaining 300,000 dollars is paid at an interest rate of prime which right now is three percent. Producers can use the system each year.
They can apply for a loan from one production period, pay that loan off as the product is being sold, that's how the repayments are made, and then apply for the following year for a similar loan.
Basically the two requirements that they must have is they must have the inventory on hand to cover the amount of the loan and they have to belong to AgriStability.
Mr Ozunko notes just over 30 producers have about 5.7 million dollars in loans outstanding now and the number of producers participating in the program is expected to increase to 50 to 60 by the end of the production year.
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