Producers Happy with Short-Term Hog Loan Program

by 5m Editor
25 November 2008, at 8:05am

CANADA - The Saskatchewan Pork Development Board says changes to the province's short term hog loan program are a significant first step in helping pork producers deal with the cash flow issues they have been facing, writes Bruce Cochrane.

Last week Saskatchewan agriculture minister Bob Bjornerud announced two key changes to the short term hog loan program launched last December.

Producers are being given the option to defer their principle payments for one year, from May 2009 to May 2010, and a requirement for accelerated repayment once the weekly pool price exceeds 140 dollars per 100 kilograms has been removed.

Sask Pork general manager Neil Ketilson says producers have lost a great deal of money and they have a lot of cash flow issues so extending the amortization will be a significant benefit and, considering producers still aren't reaching their cost of production, removal of the claw-back provision is also appropriate.

Neil Ketilson-Saskatchewan Pork Development Board

The industry I think expects to get into a better prices condition or a profitability condition sometime next spring.

We all know that prices aren't very good right now and we've got three or four months of tough sledding to do but there are some positive things out there.

The currency is way down from par with the U.S. which is where our price is derived, now around the 80 cent mark which is very significant to us.

The other thing is feed costs are down significantly from this past year so what used to cost us about 100 dollars a head to feed is now about 60 dollars.

Those two things are very positive.

If we could get some better pricing the profitability picture would improve considerably.

Ketilson notes Sask Pork is working with the province on a long term strategy which will include provisions to help producers deal with future financial problems.

He says, short term, producers are still looking for loan based programs or other financial tools that will enable them to cover some of their losses with reasonable credit terms.

Further Reading

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