N.P.P.C. opposes C.P.C. subsidy program
July 22, 2009
by Bryan Salvage
WASHINGTON — A proposal made by the Canadian Pork Council to initiate an emergency government subsidy program for the Canadian pork industry would have a "lethal impact" on U.S. pork producers, the National Pork Producers Council stated.
C.P.C. has requested the Canadian government to put $800 million into the country’s pork industry. The key component of the program is a loan to pork producers of $30 for each market hog to be repaid over 10 to 15 years. A second component would provide $500 for each sow culled plus the market value of the animal.
Such moves would artificially prop up Canadian pork production, N.P.P.C. said. Dermot Hayes, Iowa State University economist, added U.S. live hog prices would be approximately 7% lower than otherwise would have been the case.
Such a subsidy program would have a lethal impact on U.S. pork producers, said Don Butler, N.P.P.C. president. "N.P.P.C. is extremely concerned about such a program, which will shift financial pain to U.S. producers, who already have lost an average of more than $21 per hog since October 2007," he added.
Although the Canadian pork program is described as a "loan," it is unlikely commercial banks would make unsecured, subordinate loans to Canadian pork producers at a time when they are losing money, Mr. Butler continued.
"The program is really a cash bailout," he said. "N.P.P.C. is keeping all options open to address this issue."