Canadian agriculture lender Farm Credit Canada (FCC) is offering hog farmers a chance to adjust their loan payments to weather the economic impact that country’s troubled hog sector.
"The difficult hog market is a global issue that extends beyond Canada," Barry Smith, FCC Vice-President of Western Ontario Operations, said in a news release.
"Many hog producers are facing significantly higher input costs and lower hog prices, and we want our customers to know that we recognize this and are here to support them.”
Dry conditions in parts of Ontario and Quebec, as well as drought in the U.S. Midwest during summer which affected nearly 90 percent of American corn fields, has driven up feed prices by as much as 50 percent.
That is compounded by low hog prices brought on by producers having to eliminate or reduce the size of their herds, adding to an oversupply of pork.
"While many agriculture sectors are doing well, some hog producers are facing unprecedented losses, depending on the structure of the operation," Smith said.
"Producers who grow their own feed or have other revenue streams from a diversified operation may be in a better position, but FCC is committed to looking at each case individually and assessing each one on its own merit."
FCC said it is offering payment schedule adjustments or deferrals to help see customers through a short-term cash flow problem.
Hog prices are expected to improve with stronger seasonal demand and reduced supply in the spring to summer of 2013, which should help improve margins. The Canadian hog sector represents approximately 4 percent of FCC's US$24.4 billion portfolio.
"This is a resilient industry. While there has been a reduction in hog farms during the past five years, there remain a substantial number of operators who are confronting the risks, costs and operational challenges," Smith said.
FCC's customer support program was offered to customers in Saskatchewan and Manitoba challenged by flooding and excessive precipitation in 2010 and 2011, as well as customers across the country affected by the BSE, avian flu and drought over the past 10 years.
Source: Argentine Beef Packers S.A.
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