Hog feeder associations for Alberta producers are close to a reality.
A steering committee is expected to review final regulations and policies Sept. 3 and forward the plan to agriculture minister Shirley McClellan for approval.
Feeder associations borrow money from commercial lenders and then buy animals that are fed and sold, under contract, by local producers.
Associations to finance the purchase of feeder pigs may start slowly at first, but Alberta Pork director Phil Mueller said the time is right to offer these programs. Similar schemes are already available for cattle and sheep.
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“It’s hard to say how many will actually take it up,” he said.
“From the financial standpoint, producers have had a tight cash flow problem. Anything that will improve that will be welcome,” he said.
A series of summer meetings were held throughout Alberta explaining how the associations might work. Earlier in the year a farmer survey received 64 responses, with 59 in favour of the concept.
“Out of those 59, it represented something like 265,000 pig places,” said Mueller.
That extrapolates to 750,000 places because in a grower-finisher operation, three cycles of hogs go through each barns in a year.
The feeder association guarantee act was expanded to include hogs last spring with some specific regulations for pork.
The first contract to buy pigs will be capped at $50,000 per person. It typically costs $150,000 to fill a finisher barn, so several family members could borrow together.
“There is no restriction on the number of families or members (of a farm corporation) that can borrow,” said Alberta Agriculture’s Brad Fournier, who is in charge of Alberta feeder associations.
The producer must put five percent down, which goes into an assurance fund to cover defaults. Once that first contract is completed, a producer may apply for $200,000 contracts.
Organizers are still working through how feeder associations might be identified. Hogs are not branded so some acceptable identification like a tattoo or ear tag is needed.
While producers can make their own marketing decisions it is recommended they join the Canadian pork quality assurance program to guarantee food safety.
Feeder associations started in 1938 to enable people to borrow for beef cattle and sheep. There are 61 beef associations in the province, working with six major lenders.
The province partially guarantees loans to feeder associations.
