Canadian Pork Council

Canadian Pork Council

December 12, 2007 11:39 ET

Canadian Pork Industry Needs Answers Now

OTTAWA, ONTARIO--(Marketwire - Dec. 12, 2007) - Canada's 11,000 hog producers demand to know whether governments support the hog sector and its future. Producers can't wait any longer, with the situation growing more critical for their farms and their families every day.

"Pork producers are not asking for a handout," asserts Mr. Clare Schlegel, President of the Canadian Pork Council. "We are asking for some breathing room to allow us to make sense of the current pressures, the high feed costs, the high value of the Canadian dollar, the low hog prices, and to determine our future."

The Canadian Pork Council has been urging governments to help producers through this unprecedented crisis by providing a loan, along with improvements with the existing risk management programs. Governments now need to show leadership and assure producers before Christmas, that loans are available.

"While the industry has been working with governments to find solutions," Schlegel continues, "pork producers need answers now, and an emergency loan makes sense."

The urgency can not be underestimated. "We are not like the manufacturing industry, for example, which can close its doors at a moment's notice. Producers can not simply turn the key and walk away from their barns. That's why we need immediate relief," he says.

The long-term outlook remains positive, as world demand for pork continues to grow, and the Canadian hog industry, a very competitive sector, is well-positioned to be a major player in this future market.

"We just need to get there," adds Schlegel. "We can't make this transition without the involvement of government."


Hog Industry Crisis - Qs & As

What is the problem? Is this not just a normal downturn in the 'hog cycle'?

This is not a normal downturn in the hog sector. While hog prices do follow cycles, there are external influences which make this downturn much worse than normal. The unprecedented influences are beyond hog producers' control. There has been a massive shift in use of corn to fuel and away from food. This shift has been driven by billions of dollars in US subsidies. The artificial shortages have driven feed costs to record highs. And the sharp and sudden increase in the strength of the Canadian dollar has slashed the price of Canadian pigs to disastrous lows.

Why is the CPC asking for special assistance?

The effects of the Canadian dollar on top of the steep climb in feed costs have been so sudden, and so large, that hog producers all across Canada are incurring unsustainable losses.

Is the pig industry looking for a handout?

We are requesting loans; loans that are repayable with interest. We are not requesting grants or any other kind of handout.

The climb in the dollar has hurt other sectors of the Canadian economy. Why not just shut down for a while, until conditions improve?

One cannot shut down a hog farm and start it back up a few weeks later. Live animals are involved; live animals which must be maintained with feed, water, shelter and health care until they are ready for market. There are no parts to be kept in inventory waiting for a better day

Is it just in Canada that there is a problem?

No. The European Union has just reintroduced export refunds for pork. We thought these had disappeared forever. Australia has launched a safeguard investigation against imports. These are just two examples of how other countries' governments are addressing the extreme challenges facing their pork industries as a result of high grain prices and the weak U.S. dollar.

Does the Canadian hog industry have a bright future? Is it worth preserving?

Absolutely. Pork producers will adjust to these new circumstances. They always have. They have important competitive advantages including excellent genetics and a very high standard for animal health.

Rising incomes in China and elsewhere point to strong growth in worldwide demand for pork. And many pork importing countries, like Japan, for many years have looked to exporters, such as Canada, to supply part of their growing pork consumption.

Hog and pork production occurs in every province in Canada. There are approximately 11,000 pig producers. Pork exports alone are responsible for 42,000 jobs across the country, and $7.7 billion in economic activity in both the supplier sector and wages paid to employees .

This is an industry clearly worth saving!

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