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Pork Producers Should Apply Early for Federal Cull Program

by 5m Editor
12 April 2008, at 7:48am

CANADA - Canadian pork producers are being encouraged to apply as early as possible for compensation under the Federal Cull Breeding Swine Program, says Bruce Cochrane.

The $50 million program is being funded by Agriculture and Agri-Food Canada (AAFC) and delivered by the Canadian Pork Council (CPC). It’s designed to assist in restructuring the Canadian swine industry by facilitating a reduction of the breeding herd.

Pork Producers Face Worst Crisis in Recent Memory

“The pork industry is experiencing the worst price crisis we’ve had in many, many years so it’s a way to try to help bring supply and demand back into balance,” explains CPC president Clare Schlegel.

As well, he says, the program will provide an option for producers, who have seen the value of cull sows fall to virtually nothing, to exit the business and get back some reasonable value for their cull animals.

He suggests, as ironic as the situation is, the health and productivity of the swine herd in Canada and the U.S. has gone up dramatically with the circovirus vaccine so the pigs are a lot healthier and happier and growing faster. That has put the supply demand equation out of balance so this is one of the programs that are helping in the reality that we have to get our supplies lower.

He points out feed costs have gone up dramatically not only in Canada and the U.S. but around the world. In Asia producers have also been losing significant money. It’s not only Canada and the U.S. that needs to reduce but other countries around the world to allow this business to get back to profitability.

Application Forms to be Available Monday

The program begins officially on Monday (April 14) which is when application forms will be made available to producers across the country.

Agriculture and Agri-Food Canada is extending the money to fund the program and the Canadian Pork Council is handling the program’s administration.

Susie Miller, the director general, of Agriculture and Agri-Food Canada’s Food Value Chain Bureau notes, “The funding that government has allocated to the Canadian Pork Council to institute this program will target approximately a ten percent reduction in the breeding herd.”

She recalls the program was the result of discussions held with the pork industry since October when it became obvious that producers were facing unprecedented pressures and there was extra or additional assistance needed outside of regular programming.

“This particular initiative was something the pork producers themselves suggested as a means to help those who had decided or who were in the process of deciding that there was no immediate future for them in the industry.”

$225 Available Per Culled Animal

“Breeding animals that are acceptable or eligible under the program include sows, and bred gilts that you intend to farrow out as well as boars,” says CPC technical affairs specialist Francois Bedard.

He notes individuals, partnerships, corporations and cooperatives that will report income losses from producing hogs in Canada during the 2007-2008 calendar year will be eligible to collect $225 per culled animal. They must be engaged in a hog farming business and the producer must agree to leave at least one cull barn used for housing breeding swine empty for a period of three years following the slaughter of those breeding animals.

Schlegel estimates, “The program potentially could cover about 10 percent of the Canadian sow herd. We were previously at 1.54 million sows and this would take the number of sows in Canada down below 1.4 million, which is between 1.5 and two percent of the Canada U.S. herd. That should help to bring supplies back into balance.”

Program Retroactive to Fall of 2007

The program is retroactive to November 1, 2007. Animals culled and marketed between that date and April 14, 2008 will qualify for the $225 payment less the amount received from their sale. After the April 14 start date culled animals will no longer be able to enter the commercial human food chain and will be required to move through an alternate marketing stream.

There are three tranches or stages of applications that will be considered under the program.

Bedard stresses, producers won’t have to apply three times. It’s just a way for the program to allocate payments. In the first stage, applications received by May 7 will be processed followed by stage two two weeks later and stage three one month later.

Producers Urged to Apply Early

Producers are encouraged to submit their applications as soon as possible.

Mark Ferguson, policy analyst with the Saskatchewan Pork Development Board explains, “The federal government put a limit of $50 million on the funding available for the program and, once that runs out, we’ve had the indication that there won’t be further funding. The program is essentially on a first come first served basis and on April 14, when the applications are available, we would stress that producers must get those applications in as soon as they can.”

He admits, it’s difficult to estimate the potential uptake at this point.

“We believe there will be quite a few sows that will be part of the program that have already been marketed prior to the 14th of April but going forward we’re just not sure. The situation is changing daily given the market conditions. It depends on what happens in the next month with prices and feed costs. That will determine how many producers we have participating in the program.”

Slaughter Options Dependent on Location

Slaughter options will vary from province to province.

CPC Executive Director Martin Rice notes, “We are looking at having the animals, as much as possible, be channeled through facilities such as approved slaughter plants and through to rendering. It’s up to the provinces to be dealing with opportunities for food bank distribution. That is viewed as a non commercial use of the meat from these animals but it’s up to the province and food banks in that area to come up with a business plan that can then be approved by Agriculture and Agri-Food Canada.”

Manitoba Pork Council producer services specialist Jeff Clark points out, “Although this is a federal initiative it has been supported significantly by the provincial pork organizations as well as the provincial governments so it really depends on the infrastructure that exists in each province. In Manitoba we’ve had good response from our provincial abattoirs willing to divert some of those animals to food banks as well as doing euthanasia on those animals. As well our assembly yards in the province have offered their services and Rothsay as well has offered overtime shifts to process any animals that would need disposal.”

Sask Pork has been working with several provincially inspected plants and the Canadian Pork Council to organize slaughter options in Saskatchewan.

Ferguson says, “We’re trying to establish one or two central facilities that could be utilized by producers and we’re going to do our best to make that happen. There will also be the option of on-farm euthanasia for some producers however we will see in the next week what we are able to organize.”

Once the options for disposal have been determined that information will be passed on to participating producers.

CPC Strives to Stretch Funding

Rice stresses, “We do have an interest in finding the most cost effective way, respecting the animal welfare and environmental conditions, to the extent that we can make the dollars go further and we can increase the number of breeding stock that could be included in the program. There is real interest in finding ways to minimize those costs. Again subject to dealing with the animal welfare and environmental aspects.”

CPC will be monitoring the first phase of this program very closely.

Rice says, “If it appears, as we’re starting to believe, that the demand is for a great amount of breeding stock to be culled, we will be going back to the federal government to see if there is some additional funding that can be obtained.”

Applications for the Cull Breeding Swine Program including required supporting documents will be available as of April 14th on the Canadian Pork Council web site at www.cpc-ccp.com. Producers can also contact their provincial pork producer association for copies of the application. A toll free number at 1-877-655-2567 will be staffed, beginning Monday, to answer producer questions about the application process.

5m Editor