Higher feed and fuel costs, lower returns for hogs due to an over supply and the stronger Canadian dollar have created what has been described as a perfect storm for Canadian hog producers contributing to substantial losses over the past year or so.

Last week agriculture minister Rosann Wowchuk announced the cap on funds available to individual producers under the Manitoba Hog Assistance Loan Program will be increased from 2.5 million to five million dollars and the application deadline has been extended to June 30.

Puratone president and CEO Ab Freig says the increase will allow large producers to benefit from the program.

Ab Freig-Puratone Corporation

We have raised this question to the Manitoba government and we said the cap is not sufficient for large hog producers like Puratone.

We know for sure, based on our calculation, we can access more than two and a half million but the cap of two and a half million dollars ends up penalizing large producers.

So the increase is very much appreciated.

Effective, yes.

Like all hog producers we hare losing a significant amount of money.

Having the loan available to us is definitely helpful.

To continue to have that and have that availability of cash to withstand those losses that may end up taking place through 2008, so definitely the loan will be very good to have until profitability returns to the hog industry.

Freig notes hog prices tend to run in four year cycles, two years of downturn followed by two years of upturn.

He is confident hog prices will increase and that Puratone will be able withstand the low ebb in the cycle and take advantage of higher hog prices in the future.