For the last two years, Jurgen Preugchas has
experienced a different kind of drought on his
Mayerthorpe hog farm.
“Personally I have not seen two months of profit since September 2005,” said the chair of Alberta Pork.
He and other Alberta hog producers are caught up in a perfect storm caused by high feed grain and pharmaceutical prices, a rising Canadian dollar and low returns on market hogs.
He hopes an Alberta triggered cash advance through the Targeted Advance Payment program helps beleaguered pork producers under the burden of the lowest hog returns in North America.
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Announced by Alberta agriculture minister George Groeneveld Aug. 3, payments are offered for the 2007 year through the new AgriStability program.
Letters are going out to producers with Canadian Agricultural Income Stability records with information on how much they might be able to access. Payment amounts vary by farm.
Qualification rules
Eligible producers must have six months of farming in their program year, completed a production cycle in the program year, have industry income decline lower than their reference margin and a significant portion of their income derived from the hog sector.
Producers must fill in the 2006 CAIS information as soon as possible to qualify. The money is considered an advance, any over payments must be repaid.
Preugchas said the advance is just one solution to this crisis being discussed at the national level. The current situation is worse than the last depression of 1998-99 when hog prices fell to record lows.
“Back in 1998-99 when hog prices dropped to 45 cents a kg it was devastating but the difference there was it only hung on for two months. This has hung on for two years,” he said.
The outlook is grim for processors as well, which are struggling to make money during a period of labour shortages, high costs and a strong Canadian dollar.
To ease financial difficulty, processor Olymel at Red Deer announced it was dropping its prices by $12 per hog.
