Agriculture and Agri-Food Canada

Agriculture and Agri-Food Canada

July 10, 2015 14:24 ET

Harper Government Supports Industry-led Study to Explore Price Hog Hedging Program

GUELPH, ONTARIO--(Marketwired - July 10, 2015) - Agriculture and Agri-Food Canada (AAFC)

Bev Shipley, Member of Parliament for Lambton-Kent-Middlesex and Chair of the Standing Committee on Agriculture and Agri-Food, on behalf of Agriculture Minister Gerry Ritz today announced an investment of up to $169,530 to the Canadian Pork Council (CPC) to explore the feasibility of developing a hedging program that would offer price stability and address the cash flow needs of Canadian hog producers.

This support will enable CPC to study the risks and impacts of hog market price fluctuations on producers, and explore the potential of developing a hog hedging program to mitigate that risk. Under the project, consultations will occur with producers, financial institutions, packing plants, and organizations providing risk management services to producers for their assessment of this risk.

Quick Facts

  • The hog industry is the fourth largest agricultural industry in Canada with cash receipts (2011) of $3.9 billion. The majority of hog production is in Quebec, Ontario and the Prairie provinces.

  • The hog industry typically experiences price volatility and producers manage through a limited selection of short-term risk management instruments offered by hog marketers, packing plants, or producer associations.

  • This investment is being made through Agriculture and Agri-Food Canada's AgriRisk Initiatives (ARI) which supports the research and development as well as the implementation and administration of new risk management tools for use in the agriculture sector. ARI is a Growing Forward 2 Business Risk Management initiative.

  • The CPC is the national voice of the hog sector, with a membership that includes Canada's nine provincial industry associations, representing over 12,000 hog producers.

Quotes

"Our government is proud to support the hog industry's efforts to analyze the potential of new instruments, like a hedging program, that would help protect producers against fluctuations in market prices. Investing in programs to reduce risk adds stability to the hog sector and will help boost competitiveness and profitability."

- Bev Shipley, Member of Parliament for Lambton-Kent-Middlesex and Chair of the Standing Committee on Agriculture and Agri-Food

"Hog producers face a combination of production, market and financial risks that can undermine the success of a farm without a range of risk management tools and strategies. This project will explore the feasibility of a program that can mitigate the risk of margin calls so that hedging becomes a useful and used business risk management tool."

- Canadian Pork Council Vice-Chair Bill Wymenga

Associated Links

- Growing Forward 2 (Agriculture and Agri-Food Canada)

- AgriRisk (Agriculture and Agri-Food Canada)

- www.cpc-ccp.com (Canadian Pork Council)

- www.ontariopork.on.ca (Ontario Pork Producers)

Follow us on Twitter: @AAFC_Canada

Contact Information

  • Emily Hogeveen
    Press Secretary
    Office of the Honourable Gerry Ritz
    613-773-1059

    Media Relations
    Agriculture and Agri-Food Canada
    Ottawa, Ontario
    613-773-7972
    1-866-345-7972