Farmer owed $300,000 after Puratone failure

It’s been two months since Puratone entered creditor protection, but Robert Wiebe is still enraged because the hog production company owes him more than $300,000.

Wiebe, who farms near Morden, Man., delivered 54,000 bushels of winter wheat to Puratone’s feed mill in Winkler, Man., in late August and September. The company paid him for only 16,000 bu. of wheat.

“I hauled all my winter wheat to them,” said Wiebe, who has sold grain to Puratone for many years.

“They owe me for 38,000 bushels. I delivered them about 54,000 bushels.”

If it wasn’t for an excellent corn crop on his 2,200 acre farm, Wiebe said it would have been difficult to cover the $300,000 deficit.

“I had a super corn crop this year and I am going to survive. Last year I would’ve had to re-mortgage or shut down,” he said.

Even though he will carry on, it will take several years to recover from the $300,000 loss.

“That was me and my family’s paycheck for the year,” he said.

Puratone, which produces 500,000 hogs per year and is the third largest hog production company in Manitoba, entered creditor protection in September. With record high feed costs this summer, Puratone was losing $20 to $50 on every hog it sold.


In early November, Maple Leaf Foods announced it was purchasing Puratone’s 50 barns and three feed mills for $42 million.  The Maple Leaf deal will likely be completed by December.

In a statement, the company said it isn’t planning any immediate changes for Puratone’s barns, which have remained operational during the creditor protection period.

What is unclear, though, is how the $42 million will be distributed to Puratone’s creditors. A court appointed monitor, Deloitte and Touche, is overseeing the creditor protection process. Puratone owes $40.8 million to the Bank of Montreal, $40.2 million to Farm Credit Canada and $5 million to Manitoba Agricultural Services Corp. All three are secured creditors.

It also owes millions to unsecured creditors, including dozens of farmers in Manitoba who delivered grain to Puratone weeks or days before it went into protection.

Like many other producers, Wiebe assumed that Puratone was bonded and he would eventually receive payment for his grain. Besides, Puratone had called and asked him to deliver his winter wheat, so he reckoned that he would be paid.

“They phone me and kept bugging me to bring in grain. “They were short of grain, they said. So I brought grain in for three weeks.”

On top of his financial loss, Wiebe said a telephone conversation in the middle of September with Puratone chief executive officer Ray Hildebrand put him over the edge.

“When I phoned the CEO, the big boy, he told me his pigs were more important than my farm.”


The Western Producer phoned Puratone for comment but hasn’t yet received a callback.

Because of his loss and the flippant reaction from Puratone, Wiebe has joined a group of Manitoba farmers considering a lawsuit to recover their money.

At this point, though, it’s not clear who they will sue because Puratone owes more money than it received from Maple Leaf. As well, since Maple Leaf bought Puratone’s assets, under Canadian regulations it isn’t responsible for Puratone’s outstanding debt.

Regardless, Wiebe thinks the affected farmers should go after the managers of Puratone.

Keystone Agricultural Producers president Doug Chorney has heard more than a dozen complaints from Manitoba farmers about the Puratone deal.

From what he’s learned about the process, he said, it’s unfair that the entity that replaces Puratone can walk away from its financial obligations.

“We don’t think it’s acceptable for this business to carry on and all these farmers not getting paid anything for their grain…. This creditor protection… prohibited anyone from taking any action and now it seems like everyone gets off without any responsibility.”

Chorney, though, is planning to do something about the matter. KAP is planning to organize a meeting with the players involved, including Maple Leaf, Puratone and producers, to see if there is a way forward.


Chorney is hopeful that meeting can come together in a couple of weeks.