The National Pork Producers Council (NPPC) says an emergency government subsidy program for the Canadian pork industry would have a “lethal impact” on U.S. pork producers.
The Canadian Pork Council has asked the Canadian government to provide $800 million in financing. The main part of the program is a loan to pork producers of $30 for each market hog, to be repaid over 10-15 years. The second part provides $500 for each sow culled, plus the market value of the animal.
The proposal would artificially prop up the Canadian pork industry and drive down U.S. live hog prices by about 7%, according to Iowa State University agricultural economist Dermot Hayes.
“Such a subsidy program would have a lethal impact on U.S. pork producers,” says NPPC President Don Butler. “NPPC 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.”
Butler points out that while the program is described as a “loan,” it is unlikely that commercial banks would provide unsecured, subordinate loans to Canadian pork producers at a time when they are losing money. “The program is really a cash bailout,” he argues.
“NPPC is keeping all options open to address this issue,” Butler says.