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Sask Pork Calls for More Government-Backed Loans

24 September 2012, at 7:49am

CANADA - Sask Pork is calling on the Saskatchewan government to repeat a strategy which has been effective in the past in helping the province's pork producers weather severe downturns in profitability, writes Bruce Cochrane.

As a result of drought in the United States, US corn prices have risen dramatically putting upward pressure on feed grain prices throughout North America at a time when hog prices have fallen.

The downturn has been blamed for two of western Canada's largest pork producers filing for bankruptcy protection in the past couple of weeks.

Saskatchewan Pork Development Board chair Jay McGrath, says on the national front Sask Pork has been working with the Canadian Pork Council and provincially members of the board are working with the provincial agriculture department.

Jay McGrath-Saskatchewan Pork Development Board:

We've had a meeting with the ministry, not with the minister himself yet, which we hope to get soon.

We've been very lucky in the last number of years where the Saskatchewan government has been very helpful to the industry and when we get into these situations they've come through with short term hog loans and definitely listened and were willing to work with us.

A lot of people will hear about the risk of countervail from the U.S. so straight out grants, although they really help get cash into producers' hands are probably unlikely and we don't want to cause more problems for the producers.

That's one thing that's always considered and governments are very aware of that as well so the short term hog loan that Saskatchewan has done a few times in the past is a way to get cash into the farmers' hands.

It lets them pay the bills and the employees and its a fairly good program if we can get something like that going again.

Mr McGrath notes we've heard of a couple of large producers going into receivership, and while they don't get the headlines, there's a lot of smaller farmers that are shutting down as we speak.

He says that's why having something put in place sooner rather than later is so important not just for the hog producer but also the associated industries, from feed suppliers to trucking companies that supply and service the pork producers.