Market Overview

Federal and Quebec Governments Work Together to Assist the Hog Sector


OTTAWA, ONTARIO--(Marketwire - Oct. 24, 2012) - Federal Agriculture Minister Gerry Ritz and Quebec Deputy Premier and Minister of Agriculture, Fisheries and Food Francois Gendron today gave an update on the status of the hog industry in light of high feed costs coupled with low hog prices that have seriously affected the cash flow of hog producers.

In recent months, the federal government has been working closely with the Canadian Pork Council and other hog sector stakeholders to clearly assess the challenges facing the hog sector in Canada. The Quebec government has been doing the same with its hog sector.

The hog industry of Quebec and Canada is a major economic driver. In 2011, the Canadian hog industry generated close to $4 billion in farm receipts and $3.2 billion in exports. In Quebec, the hog sector contributes $1.25 billion in farm cash receipts and $1.4 billion in exports.

"Supporting the industry's long-term viability benefits all Canadians," said federal Agriculture Minister Ritz. "That's why, after meeting with industry leaders earlier this summer, we formed a government-industry task team to examine the state of the sector more closely and to monitor the industry going forward."

"I have met with the Quebec Federation of Pork Producers. I understand their situation and am listening to their needs. I have also informed my federal and provincial counterparts of the difficulties faced by Quebec hog producers, and I would like to assure the producers that Quebec is putting all of its support tools at their disposal," said Quebec Agriculture Minister Gendron.

"The quality of our pork products is a source of pride and prosperity for Quebeckers," added the Honourable Christian Paradis, Minister of Industry and Minister of State (Agriculture). "This is the reason why we stay in close contact with local stakeholders, including the Quebec Federation of Pork Producers. We are going to maintain a watchful eye to ensure that producers are taking full advantage of the resources available to them."

The Hog Industry Task Team, which includes representatives from the Canadian Pork Council and the Canadian Meat Council, was formed to develop a common understanding of the challenges facing the sector and to look at possible solutions to address them, including working to ensure that the sector makes full use of existing programs. Industry and market analysts expect an improvement in market conditions for hog producers by the spring of 2013, both in Canada and abroad.

Financial institutions have also been engaged in these discussions. In addition, the federal and Quebec governments are continuously working together to assess and monitor the situation.

The federal and provincial governments and industry have agreed on the following actions to quickly help the hog sector deal with short-term financial pressures:

-- The federal and provincial governments and industry will work together
to better inform the sector on how producers, who are in a position to
take full advantage of support available through existing business risk
management programs, can do so. These include AgriStability, AgriInvest,
Agri-Quebec, and cash advances available through the Advance Payments
Program (APP).

-- Program administrators are making every effort to fast-track the
processing of payment programs and APP advances.

-- The federal government will continue to work with producers, producer
associations, and financial institutions to facilitate producer access
to financing and cash advances by providing all possible assistance to
farms who are potentially profitable. If producers have problems
availing themselves of certain programs, the federal government will
work with the producers and administrators of the APP on a case-by-case
basis to develop plans for repayment of former advances, taking into
account the financial situation of each producer.

-- The federal and Quebec governments will examine ways to help producers
protect themselves from price fluctuations using private mechanisms,
such as the Market Risk Management Service currently provided by the
Federation des producteurs de porcs du Quebec.

-- AAFC is adjusting the Hog Industry Loan Loss Reserve Program (HILLRP) to
ensure that hog producers who already have a loan under the program, and
their financial institutions, have greater flexibility in the short term
to make business decisions that will help them deal with the current
liquidity crisis. The terms of the program have been adjusted to allow
lenders to extend an interest-only payment period.

In addition to the above, the following actions have also been taken:

-- An agreement signed between the federal and Quebec governments under
AgriFlexibility has provided part of the funding for Quebec's Farm
Business Adaptation Support Strategy, including the Support Program for
Sectoral Development Strategies. At this time, 655 hog businesses are
eligible for the Strategy program, and close to $9 million has been
offered for investment in farms. Furthermore, a total of $1.7 million in
funding for five projects has been granted to the hog sector for
measures related to health, animal welfare, value chain implementation
and market development.

-- In 2012, the Financiere agricole du Quebec provided support under the
Programme d'assurance stabilisation des revenus agricoles (ASRA) and the
Agri-Quebec program and it plans to continue working with hog producers
in the future.

"These are the recommended programs that producers can currently access to address liquidity pressures", said Jean-Guy Vincent, Chair of the CPC. "Pork producers are also dealing with the accumulated impacts of the higher Canadian dollar and U.S. country-of-origin labelling (COOL) legislation, and we will continue to advance ideas through the task force on what additional actions may be required until stronger market conditions return."

The Hog Industry Task Team will continue to work to find ways to increase sector competitiveness in the medium and long term. Ministers Gendron and Ritz will continue to keep a close watch on the status of hog production and do everything they can to help producers address the challenges they are currently facing.

For more information on the programs, visit the following Web sites:


AgriInvest and Agri-Quebec

Farm Business Adaptation Support Strategy

Support Program for Sectoral Development Strategies

Media Relations
Agriculture and Agri-Food Canada
Ottawa, Ontario

Jeff English
Press Secretary
The Office of the Honourable Gerry Ritz

Maxime Couture
Press Secretary
Office of the Deputy Premier
and Minister of Agriculture, Fisheries and Food

Caroline Fraser, Communications Advisor
Ministere de l'Agriculture, des Pecheries
et de l'Alimentation
418-380-2100, ext 3512

Gary Stordy
Canadian Pork Council
613- 236-9239, Ext. 277

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