* Banks not seen lending to money-losing industry
* High feed costs from drought causing losses
By Rod Nickel
WINNIPEG, Manitoba, Sept 17 Money-losing hog
farmers in Manitoba, hurt by high feed costs, need between C$130
million and C$150 million ($134 million-$155 million) in
government loan guarantees to survive, the Western Canadian
province's biggest farm group said on Monday.
Severe drought in the United States has decimated crops,
which has led to higher costs for feed grains and pushed North
American hog farmers into steep losses.
Manitoba is Canada's third-largest hog-producing province,
after Quebec and Ontario. Canada is the world's biggest exporter
of live hogs, mainly to the United States, and the third-largest
Canada's second-biggest hog farm operation, Big Sky Farms in
Saskatchewan, entered receivership last week and another major
hog farmer, Manitoba-based Puratone, received protection from
creditors on Wednesday.
Banks have stopped lending money to hog farmers large and
small, leaving them hard-pressed to survive until they see more
favorable market conditions, possibly next spring, said Doug
Chorney, president of Keystone Agricultural Producers, an
organization that promotes the interests of the provinces'
"We are on the verge of not just having a downturn here -
this is an industry-killing experience that we're going
through," Chorney told Reuters.
It costs C$170 to raise a pig for sale, but farmers are
currently collecting no more than C$150 per hog, Chorney said.
As hog prices fall, so has the credit available to farmers,
said Mike Hoffort, senior vice president of portfolio and credit
risk for Farm Credit Canada, one of the country's biggest farm
Most farmers who need credit are seeking operating loans, he
"A lot of our producers are experiencing cash-flow
challenges for sure," Hoffort said.
Canadian Agriculture Minister Gerry Ritz said the government
will explore all assistance options under existing programs.
"We will continue to work with the hog industry and ensure
that our programs help producers and processors achieve
long-term stability," he said in a statement to Reuters.
Ritz said on Friday that he would meet with farm lenders
this week to assure them the hog industry has a bright future.
A spokesperson for the Manitoba government said it would
maintain close contact with hog industry and federal officials
in the coming weeks, and that it is important that any action
not breach international trade obligations.
Chorney said the Manitoba Pork Council, which represents the
province's hog farmers, intends to meet soon with the province's
agriculture minister, Ron Kostyshyn.