HomeMy WebLinkAboutThe Citizen, 2009-09-17, Page 14More than 600 desperate pork
producers gathered in Stratford,
Sept. 9 to hear information to help
them decide on how to get out of the
business or what to expect if they
stay in.
The meeting was organized by the
Pork Producers Associations of
Huron, Perth and Oxford to provide
short term information and as
accurate as possible a long-term
forecast , said Mike Bosch, Perth
County president.
Martin Rice, executive director of
the Canadian Pork Council (CPC)
looked at both the circumstances that
brought the industry to its current
desperate state and how farmers who
want to get out can take advantage of
the federal government’s transition
program.
Pork production has basically
been troubled since the 2004
countervail trade challenge by the
U.S., Rice said. Since then a perfect
storm of a high Canadian dollar, the
U.S. country of origin labeling that
discriminates against Canadian
meat, the world-wide economic
downturn, the circovirus disease
outbreak in herd and finally the
H1N1 influenza that was misnamed
“swine flu” has devastated the
industry.
Rice said the CPC had approached
the government for a $30 per hog
subsidy to help producers survive
but neither the government nor
opposition parties supported it,
worried about the implications for
international trade.
Having failed to get a subsidy
from the government, CPC proposed
a transition plan that required it to
look ahead at where the industry
might be in 2014 in order to sell the
idea to the government.
One goal is to get consumption
back up to 21 kg. per year in Canada,
which would mean a market for an
extra 150,000 tonnes. CPC
anticipated exports remaining at a
million tonnes but with only 20 per
cent of that going to the U.S. It’s
looking for high-value markets such
as Japan, Korea and the European
Union to buy more and return more
to producers.
In its proposal for a transition
plan, CPC had to deal with three
categories of producers, Rice said.
First is those producers who would
get out of the industry if they could
afford to. The second group is those
who are just managing to hang on in
the current difficult circumstances.
The third group includes those who
see the ability to prosper if the
situation turns around and who may
expand by buying up assets of those
who want to get out.
In response, the federal
government promised long-term
loans with government-backed
credit that financial institutions can
offer to allow operations with a
viable business plan to restructure
their businesses.
To promote market growth, a $17
million International Pork
Marketing Fund will be set up for
market research, promotion and
access initiatives to find new
customers for Canadian pork
products.
For those who want to get out of
the business the $75 million Hog
Farm Transition Program is designed
to allow producers to tender bids for
the amount of funding they need to
cease hog production for at least
three years. CPC will be in charge of
administering this program but is
seeking another organization with
more manpower resources to do the
work.
“We want to make this program
available to as many producers as
possible,” Rice said.
For those in financial distress there
were two speakers to offer advice.
Bob Anderson of Agriculture
Canada explained the Farm Debt
Mediation program which he said
has about a 75 per cent success rate
in meeting an agreement between
farmers and their creditors.
If a creditor sends a notice of
intent to foreclose to a farmer, it is
also obligated to tell him or her of
the Farm Debt Mediation process. A
farmer has 15 days to contact the
mediation service.
Anderson urged farmers to act
quickly. “Sometimes we’re
contacted when the sheriff is coming
up the lane,” he said. While at times
they’re still able to prevent
foreclosure, this isn’t the best
circumstance.
Engagement of the mediation
service puts a stay of 30 days on
foreclosure. This can be extended up
to three times during the process.
The program sends a consultant to
work with the farmer to get all
financial statements in shape and
compile a list of all creditors.
The consultant will see if there’s a
way the business can be back on its
feet. He or she will put together a
proposal and arrange a meeting with
creditors to discuss it, at which the
owner can make the presentation or
the consultant can handle it, though
the owner will have to answer the
necessary questions.
Success is reaching a signed
agreement between the owner and
creditors that may range from a plan
for the farmer to get out of the
business or to rearrange payments.
The mediation process handled 57
files in the past year, but the pace has
been picking up with 29 in the past
two months. Only two hog farmers
were in that number with everything
from cash crop to greenhouse
operations going through the
process.
Ted Oldfield, a Waterloo lawyer,
agreed the farm debt mediation
process has a high success rate,
saying he has been involved in 200-
300 of the mediations.
He urged farmers to avoid seeking
bankruptcy unless they’re in the
situation where all their assets are
gone and they still have debts. “It’s
not a place any farmer should go if
you’ve still got assets,” he said,
because the farmer loses control of
his future to the bankruptcy trustee.
If you’re facing a financial crisis,
take action early, he urged. Get the
books in order. Do a realistic cash
flow as a basis for planning. “It’s
important your figures are in order.”
A lot of farmers are so busy doing
the day-to-day farm work they can’t
see the long term.
“Set goals. Get them in writing. A
written proposal has more credibility
with lenders,” Oldfield said.
So, where is the industry going?
Al Mussel of the George Morris
Centre provided an overview of the
future.
He could offer little hope of
dramatically higher prices,
predicting $100 per hundred
kilograms throughout the fourth
quarter rising to perhaps $130-$136
for the second and third quarters of
2010. If the “swine flu” fear
subsides there may be a slight
improvement.
While various factors have created
a sluggish demand for pork,
expansion of the red meat sector in
Ontario has created a situation where
Ontario cannot grow enough corn to
meet the demand. Ontario can grow
enough corn to feed one million
cattle or nine million hogs, but
producers have geared up to export
meat and so they have to import corn
to feed them. “It’s very difficult to be
importing feed and exporting
animals,” he said.
So how do pork producers get out
of the current situation? Some have
been taking a new look at supply
management, but Mussel said the
realities of the red meat market and
current trade obligations make it
nearly impossible to make it happen
today.
In the short-term, he also didn’t
hold out much hope from safety nets
either. “Safety nets aren’t designed
to deal with crises like BSE in beef
or the current pork industry,” he said.
“Safety nets are not long-term
solutions. We need to look at a more
advance solution.”
Despite the lack of quick
solutions, Mussel held out long-term
hope. “At the end of the day, Ontario
has a big natural advantage. We have
efficient corn producers. We have
good pork producers.
“In the future there will be
opportunities in the Far East. We
have advantages to supply that
market.”
China and India have an exploding
middle class that provide huge
potential for sales, he said.
He said the North American red
meat industry of the last 15 years is
gone. In future the market will be
oriented to countries other than the
U.S.
PAGE 14. THE CITIZEN, THURSDAY, SEPTEMBER 17, 2009.
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Agriculture600 pork producers hear info on crisis
The county is looking into the use
of its forests for maple syrup
production.
Erica Garfat, forest conservation
officer, presented a report to county
council’s committee of the whole
Sept. 9 meeting in which she noted
that a landowner had expressed
interest in using a county forest to
make maple syrup.
Garfat said that while the majority
of Huron’s 13 forests are plantation
forest, there is a hardwood
component in eight tracts.
The report noted that the Upper
Thames Conservation Authority has
a lease agreement for this purpose
on one of its properties.
Garfat listed other issues for
consideration, among them that of
liability and insurance as well as the
potential of devaluing logs for
hardwood from tapping.
Garfat also said that to be effective
the project would require staff to
monitor it.
Her recommendation was that
further research be done with a
report to be completed for council at
the completion.
Councillor Max Demaray of
Howick mentioned the maple syrup
production that used to be done in a
forest in Grey and suggested that the
person involved might be a good
resource for staff.
Councillor Bernie MacLellan of
Huron East felt the idea was worth
further study, and made a motion to
approve the research. “Let’s find out
the scoop and vote on it after we get
more information.”
By Keith Roulston
The Citizen
Huron looks at maple syrup
production from county forests
By Bonnie Gropp
The Citizen
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