A government subsidy programme for the Canadian pork industry would have a “lethal impact” on US pork producers, according to the National Pork Producers Council.
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A ‘strategic transition plan’ drawn up by the Canadian Pork Council (CPC) earlier this month asked the country’s government to pump C$800m (US$723m) into the pork industry.
The key component of the programme is a loan to pork producers – to be repaid over ten-15 years – of C$30 for each market hog. A second component would provide C$500 for each sow culled plus the market value of the animal.
CPC said it believes producers need to be committed to change in order to be profitable in the future.
“They know that many of the fundamentals that resulted in strong growth in the past no longer exist but that new opportunities will arise. This plan outlines a roadmap to ensure the industry is still here to take advantage of those future opportunities,” said CPC chair Jurgen Preugschas.
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By GlobalDataHowever, south of the border, the NPPC believes the proposals would have a “lethal” impact on US pork producers.
“NPPC is extremely concerned about such a programme, which will shift financial pain to US producers, who already have lost an average of more than $21 per hog since October 2007,” said NPPC president Don Butler.
He added that while the programme is described as a “loan,” it is unlikely that commercial banks would make unsecured, subordinate loans to Canadian pork producers at a time when they are losing money.
“The programme is really a cash bail-out,” he said. “NPPC is keeping all options open to address this issue.”
In response, a spokesperson for the Canadian Pork Council told just-food that it is pleased the NPPC is watching what the council is doing.
“Our industry is about 10% the size of what they do in theirs so I can’t understand why they can be concerned about what we do. The number of sows in Canada have been decreasing and export hogs have been decreasing also, so we are not sure how they can be concerned what we do when they should be concentrating on their own market.”
