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Retroactive Extension of Federal Cull Breeding Program Urged

by 5m Editor
6 September 2008, at 7:30am

CANADA - The Canadian Pork Council (CPC) is calling on the federal government to expand the breeding swine cull program to include more slaughtered animals retroactively.

The national program, officially launched in mid-April, offered Canadian hog producers who agreed to de-populate breeding barns, and leave them empty of breeding stock for a minimum of three years, $225 per animal culled.

The program was created to reduce the Canadian breeding herd in an effort to bring supply back in line with demand and improve prices, and also to allow producers who had decided to exit the industry to do so with a certain amount of equity.

Producers who had culled and marketed breeding animals between November 1, 2007 and the program’s official launch, as well as those planning to cull stock, were eligible to apply. However, those animals culled after the official launch could not enter the commercial food distribution chain and had to be directed to rendering, some other form of disposal or to use by food banks.

Program Results in Approximately Eight Percent Cull

In total, by the September 1 application deadline, about 550 producers across Canada had applied to cull approximately 120,000 animals under the program.

“The initial target was about 10 percent of the Canadian herd. That’s about 150,000 head of sows,” says CPC president Jurgen Preugschas. “We haven’t quite reached that. We’re very close to 120,000 sows.”

He says that, because many producers had already culled a portion or all of their sows prior to the program’s November 1 cut off, CPC has asked agriculture minister Gerry Ritz to extend the date to August 1 to allow those producers who had started culling animals earlier to be part of that program.

Preugschas says that while the minister’s response has been positive the matter must go before cabinet for final approval. CPC has not yet been told whether or not cabinet has or will approve the extension of the program.

Such a change would be very significant for those producers who decided to exit the industry prior to the November 1 program start date.

Change Considered Critical for Producers Who Culled Early

“For 24 months we’ve been in a loss position and so people were suffering significantly and that’s why they started de-populating,” says Preugschas.

Producers in many different parts of the country actually started de-populating in July and August of 2007.

“They were maybe receiving $50 per sow. This would give them the $225 so you can figure out rather quickly that there are some significant dollars that would assist those people in reducing either their debt or having a little bit to re-invest.”

Two Changes Receive Approval

Two changes have been approved. One relates to the feed allowance provided to help offset the costs of maintaining hogs until they can be sent for slaughter, and the other to deadlines for submitting the necessary documentation to support the cull and trigger the payments.

CPC executive director Martin Rice recalls the allowance given for feed was initially 15 days but, in many situations, finding slaughter options outside of the normal distribution system and other situations arose where producers were not able to market the animals within the 15 days.

“The decision by Mr. Ritz is that the allowance is moved up to 30 days from 15, and that’s an additional $1 per day for those animals, and then in some special circumstances it will be up to 45 days.”

Rice estimates an operation that is removing or has removed 200 swine would qualify, under normal circumstances, for up to an additional $3,000.00 because of the 15 day extension and up to another $3,000.00 if special circumstances caused delays beyond 30 days as was the case in the Maritimes.

He notes that while some operations only culled 10 to 20 sows, those applying for the maximum 6,000 would be looking at several thousand dollars.

Application Deadline Passes

Although the September 1 application deadline passed earlier this week, producers have until November 1 to complete their culls. Originally producers were given 120 days from their approval date to submit the documentation necessary to trigger their payments but that has been changed.

“Because we have passed the point of the program’s opening or window for registrations and because we know we have enough money left we are now looking at a general deadline of January 15 for submitting the documentation,” says Rice.

Rice acknowledges “There have been a few farms that decided not to proceed with their cull because conditions have changed.”

However, he says, if the full 120,000 head applied for under the program end up being culled, it will represent about eight percent of the total national breeding herd, just short of the 10 percent reduction that had been targeted.

He says while Ontario producers applied to cull the largest number of animals, the percentage applied for was the highest in the Maritimes. He notes applications from Ontario, the Maritimes and Saskatchewan were above the original 10 percent target while applications from Quebec, Alberta and Manitoba came in under 10 percent.

Uptake Low in Manitoba

Manitoba Pork Council producer services specialist Jeff Clark estimates producers in Manitoba have applied to cull about 5.5 percent their breeding stock.

“It hasn’t been as strong an uptake as in other parts of the country,” he says.

He believes that speaks to the strong industry that exists in the province with two strong packers and close proximity to U.S. business partners.

Saskatchewan Cull Expected to be Above National Target

Saskatchewan Pork Development Board (Sask Pork) policy analyst Mark Ferguson observes, “There have been, we believe, just over 40 producers that took part in the cull breeding swine program in Saskatchewan. I think, in the end, just over 10 percent of Saskatchewan’s breeding herd will be culled under the program.”

Program Considered a Success

As for the overall success of the program, Preugschas observes, “The easy answer in terms of meeting targets it’s been, I think, highly successful.”

He concedes, “In terms of influencing price, it may be too early to tell at this point in time. You have to remember that once a cull takes place, it takes just about a year for that to work through the market.”

However, he stresses, “As hog producers in Canada we were pleased that the government did come up with that program and it has helped some producers who are choosing to exist to exit with dignity and that was important to us.”

5m Editor