Federal Loan for Pork Producers Can Help Cut Costs20 September 2013
CANADA - The Manitoba Pork Credit Corporation estimates pork producers can save as much as two and a half dollars per pig on input costs over the production cycle by taking advantage of loans offered under the Advance Payments Program, writes Bruce Cochrane.
The Advance Payments Program is a federal loan guarantee program created in 2007 that provides pork producers short term low interest operating loans based on the value of inventory.
Randy Ozunko, the manager of the Advance Payments Program with the Manitoba Pork Credit Corporation, says interest in the program has grown in the last couple of years.
Randy Ozunko-Manitoba Pork Credit Corporation:
The funding actually comes from a financial institution and we get better interest rates from that financial institution because the federal government guarantees the program so they're guaranteeing the financial institution with be paid back.
As a result the interest rate we charge to producers is lower and the program is administered by the Manitoba Pork Credit Corporation.
The interest varies depending on the year.
We've seen an increase in the last couple of years.
Right now in 2013 we have about 33 producers with loans outstanding of about 5.7 million.
We expect to be around 50 to 60 producers at the end of the production year.
The production year runs from April of one year to September of the following year so the loans can be issued any time within a 12 month period starting in April of one year and repayment must be made at the end of August or beginning of September of the following year.
The main reason why producers are interested in the program again is because the money comes up front.
It's a cash advance, helps producers with all their input costs and the interest rates at zero percent for the first 100 thousand, three percent for the next 300 thousand can help producers save an enormous amount of money over that production period.
Mr Ozunko estimates, with feed representing two thirds of the cost of producing pigs, the program saves producers anywhere from two to two and a half dollars per pig over the production period.
ThePigSite News Desk