Nearly all creditors of Big Sky Farms voted Feb. 8 in favour of a repayment plan proposed by the hog company from Humboldt, Sask.
When the votes were counted, 763 of 774 creditors, or 98.6 percent, voted to approve the plan. Most of the votes had been sent by proxy and about 40 people attended in person.
For the plan to be approved, two-thirds of the yes votes also had to represent at least two-thirds of the value of the proven claims.
That requirement was also easily met, as 98.4 percent of the value was represented on the affirmative side.
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Chief executive officer Casey Smit said the matter would proceed to court Feb. 11, when the company would ask it to sanction the plan and set a date to exit protection from the Companies’ Creditors Arrangement Act. That is likely to be in late March.
The creditors will then be paid according to the plan.
Smit said several farmers at the Feb. 8 meeting asked about the company’s future stability.
Some asked about the plan and the company’s grain incentive program, which offered a premium to those who delivered after Big Sky entered CCAA protection Nov. 10.
“They’re voicing their concerns,” he said. “This was a compromise to a situation that we believe was unprecedented in the industry.”
Smit said it wasn’t possible to please everyone.
Big Sky ran into difficulty after several events combined to turn a typical downturn in the hog industry into a 30-month marathon.
Rising feed costs, country-of-origin labelling, the rising Canadian dollar and the H1N1 influenza virus lined up outside the company’s control.
Smit said the company is now well positioned for the future.
“Hog prices are starting to recover,” he said, noting July 2009 Chicago Mercantile Exchange futures lost 25 percent of their value after H1N1 became news.
The virus is now out of the headlines and hog prices have been picking up since late November.
“Feed prices have come down from their record high to more historical levels,” Smit said. “Feed costs were more than $100 a pig.”
Tightening supply as sow numbers correct should also help the company, but the Canadian dollar still remains higher than it typically has been.
“Every cent increase in the dollar is worth almost $1 million to Big Sky on an annual basis,” Smit said.
He said the company has shown it can compete at a 95 cent dollar, but a 10 cent drop wouldn’t hurt.
