Hog farm transition program canadian pork council

Farm Development. Back Starting or Expanding a Hog Farm. Animal Care. Swine Health. Back Power or Natural Gas Emergency. According to the final evaluation report for that program: Footnote As the CPC noted that hog industry rationalization and consolidation undertaken was not enough to enable the sector to weather the global economic crisis that began in , they developed strategic transition plan for the industry to weather the crisis.

Taking some producers out of the market was expected to improve the conditions for those staying in the business. However, that only dealt with the production of hogs.

The CPC also noted there was a need to deal with debt level of producers, which was just as critical. The CPC reported that many hog producers were having trouble securing bank financing and supplier credit due to the extended revenue crisis and ongoing uncertainty for example, recession, H1N1 impacts, and so on. Financial Institutions confirmed that the value of assets on hog farms had dropped and businesses had lost their capacity to service short-term debt.

The CPC and other industry representatives foresaw a loss of critical mass in the hog production sector in the absence of short term assistance to help remaining producers weather the economic crisis. Such a loss of critical mass would have further undermined the competitiveness of the processing sector, to which Canadian hog producers could sell their products to, making it difficult for the industry to rebound in the future.

Some producers, especially larger producers, could not exit the industry even if they had wanted to because their debts were too large. Providing lenders with government reserve-backed loan guarantees was the only way to persuade financial institutions to extend loans to hog producers over the longer term. To increase lending to hog producers under uncertain market conditions, lenders needed to be assured that significant losses on loans would not be incurred.

Speed of the intervention was critical because many operators were close to bankruptcy. The programs aimed to promote a viable, competitive agricultural sector.

The PAA linked Business Risk Management BRM programs to the strategic outcome of "a competitive agriculture, agri-food and agri-based products sector that proactively manages risk".

The aim of HILLRP was to assist otherwise viable producers to manage short-time debt through conversion to longer-term loans and restructure their businesses as necessary to proactively take advantage of future market opportunities. The goal of HFTP was to help in the short-term to reduce the hog supply by assisting less viable producers to leave the industry and thereby improve the longer-term sustainability of the sector.

Footnote 12 A key component of Growing Forward was the Business Risk Management BRM initiative including a set of programs providing producers with effective tools to manage business risks that are largely beyond their control, such as drought, flooding, low prices, and increased input costs, and remain competitive within the agricultural sector, thereby helping them to stabilize their farm income.

Footnote The crisis facing the hog industry was a problem national in scope and it was important to have a national intervention that eliminated any potential competition between the provinces. Industry organizations could not have dealt with the issue in part because of resource organizational and financial implications, but also because this would have been outside their mandate.

The Federal Government did not assume responsibilities for the HFTP that could have been left in the hands of the industry.

AAFC had clear objectives and conditions as to how the funds would be distributed for example the auction process , and was an active participant in the program management team that oversaw both the development and implementation of the program. While the program was managed by AAFC, lending was done by financial institutions. The program provided financial guarantees to financial institutions for long-term loans.

The program used a strong strategy in risk sharing, relying on good lending practices and expected producer viability based on business plans. The programs were introduced to contribute to the efficient performance of the Canadian hog industry as a whole. In essence, the two programs were short-term initiatives that responded to a need for improved hog market efficiencies stemming from specific economic global recession and market lack of financial liquidity and product oversupply problems.

Footnote 17 As profit margins and margins in the industry were shrinking rapidly at the time because of the prolonged downward market situation, the amount of financial support available under AgriStability was decreasing, thereby limiting the options for producers.

Hog association representatives and producers indicated that many hog farmers had already accessed short-term loans under the Advance Payments Program APP and had no equity left, with reduced or negative profitability because of the prolonged nature in the downturn of the market. As financial support available under AgriStability was decreasing and the fact that many producers were already involved with APP, producers had essentially become ineligible for further assistance through the existing programs.

HILLRP provided immediate financial relief to producers willing and able to remain in the industry as a viable entity by restructuring short-term debt including APP loans into long-term debt.

HFTP helped producers unwilling or unable to remain in the industry with a means to pay their debts and close operations. A total of producers registered for the HFTP which represented Of the producers registered, were issued bid forms Footnote 18 , submitted bids, and had their bids accepted. Table 4 shows the geographic distribution of HFTP payments compared to the distribution of hog producers and total Canadian herd size in each region in The distribution of HFTP payments across provinces roughly reflected the number of producers and size of herds in each province, with the exception of Quebec for two reasons.

First, the more prevalent use of contract finishers reduced take-up as these operations were not eligible for the program. The evaluation found the program was accessible to producers across the country. Given that 39 percent of producers who had submitted bids were not successful, some producers and key informants from CPC suggested that the program could have helped more producers if more money had been made available.

However, reducing the number of producers in the industry was not an objective of the program. Instead, the program targeted a reduction in hog inventories. The level of participation from hog producers was adequate given that all program funds were expended.

In fact, the document review revealed that the cumulative value of submitted bids for each tender exceeded the compensation amounts available through the auction.

Program documentation Footnote 22 reveals that hog producers who won their bids closed their operations. Operations were still closed as of and all producers who were interviewed indicated that they were not planning to reopen their hog operations.

In accordance with the contribution agreement, producers who received payments under the program were randomly selected for monitoring inspections. Nearly three-quarters of producers who participated in HFTP had fewer than AUEs; these could be considered small-scale operations and likely primarily sold live hogs. At the time the program was launched, CPC estimated that the industry needed to reduce its production by 6.

Program architects believed that HFTP could contribute to reducing the national herd size. Of these animals , were sows which would not normally be removed from the herd - that is, because sows are typically retained for breeding.

On average each sow produces 20 offspring per year resulting in a substantial multiplier effect associated with sow reductions. The reduction of , sows is the equivalent of 2.

Table 5 shows the annual hog production in Canada from to As indicated by table 5, Canadian hog production decreased from 31 million head in to approximately 27 million head in ; a net decrease of 4.

Canadian annual hog production recorded a particularly marked negative growth rate between minus 9. The data suggests the program contributed to curbing an otherwise expected growth in hog supply over the to period.

Table 5: Canadian Hog production Footnote This analysis shows that the program met its target of a reduction of the hog inventory by 10 percent using two analytical methods: first, by indirectly removing 2. A total of participants were matched out of the who participated in HFTP and used in this analysis. This decrease became steeper from , when the HFTP was introduced. Most HFTP participants reported farming income in Figure 2 shows that the contribution of hog sales to their market revenues plummeted to virtually zero.

While many participants took advantage of the program to exit farming, most of them used it to transition into other productions. Alberta total hog sales: — 21,, — 18,, — 17,, — 17,, — 15,, — 8,, — 1,, Manitoba hog sales: — 17,, — 19,, — 16,, — 11,, — 12,, — 9,, — 2,, — 2,, Ontario hog Sales: — 67,, — 58,, — 57,, — 53,, — 48,, — 31,, — 11,, — 2,, Figure 2 shows the average contribution of hog sales to total revenues of HFTP participants by province, for Alberta Manitoba and Ontario from to The contents of the figure are as follows:.

Alberta: -. Manitoba: -. Ontario: -. They were smaller operations on average and the median participant had a net operating income lower than the median net operating income of hog operations in general.

Most of HFTP participants were located in Ontario, but in proportion a greater share of Albertan hog farms participated in the program. Due to data limitations, it is not possible to determine whether those participants exited farming or just ceased to participate to AgriStability and AgriInvest. The median profit margin of HFTP participants went up in compared to when the program was implemented.

The median net operating income of HFTP participants more than doubled between and The overall number of hog operations in Canada decreased from to Over that period, the remaining hog operations received less program payments, more revenues from the market and their median profit margin increased. Over that three year period, the median net operating income of HFTP participants also improved. As shown in Table 8, the average net operating income of HFTP participants more than doubled in compared to , when the program was implemented.

The rules and regulations governing the building or expanding of pig farms in Manitoba are outlined in a number of provincial Acts and Regulations, as well as in municipal Development Plan and Zoning By-laws.

Below are links to the key Acts and Regulations applicable to the review and approval of new pig barn proposals in Manitoba:. The Planning Act: This legislation has some rules which regulate the swine sector from a locational perspective. The Environment Act : This Act outlines certain rules and requirements that regulate the swine sector from an environmental perspective.

In addition to the above provincial acts, regulations and codes, every municipality in Manitoba has a Development Plan and Zoning By-law that will identify unique land use policies and siting and setback requirements for livestock development in that municipality.

Swine Cost of Production Models : this document prepared for Manitoba Pork by MNP estimates cash flow projections and trial balance sheets for various production models, and provides insight into the economics of the sector.

Alberta Pork's Hog Price Calculator : Alberta Pork, with technical support and funding from the Canadian Pork Council, has developed a pricing calculator, market reports, and cost of production studies to assist producers. Synopsis: When we look across the Canadian swine sector it becomes apparent that due to the age of most facilities a large percentage will need to be replaced or renovated over the next few years — as most buildings average between years old.