Hog farmers can begin talking to their lenders this week about access to government-backed bridge loans but producers should not expect that money will be quickly available across the country.
On Oct. 2, the federal government announced the hog loan program would launch Oct. 5.
In an Oct. 2 statement, Canadian Pork Council president Jurgen Preugschas from Mayerthorpe, Alta., said the industry lobby is “relieved that the programs will be available shortly.”
But CPC public relations manager Gary Stordy said early availability across the country will be spotty.
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“We would prefer that the program be uniformly available but various lenders are at different stages in informing their regional staff and are at different stages in developing their approval rules,” he said in an Oct. 5 interview. “Any producer going to a lender office today can start discussions but they should not expect approval or a loan today.”
As an example, he said while the major national banks are further along in preparing for the program, the credit union system is not centralized and rules can vary from region to region.
Agriculture minister Gerry Ritz announced the Hog Industry Loan Loss Reserve Program in August as a way to make hundreds of millions of dollars in loans available to a hog industry that has been hit by more than three years of losses and equity erosion.
Private and public lenders like Farm Credit Canada will administer the program, lending money to farmers who can convince lenders that they have a business plan that will make them viable if they can get additional financing in the short-term.
Interest rates will be commercial but Ottawa will guarantee the loans against default.
Producers can receive more information on the program at www.agr.ca/HILLRP.
Meanwhile, the CPC is launching this week a program that will make $75 million available to producers interested in bidding for money to buy them out of the business for a minimum of three years.
Beginning Oct. 8, farmers interested in at least temporarily getting out of the industry will be able to contact the CPC for information on the Hog Farm Transition Program and to receive a registration form to take part in future auctions.
Information is available at www.cpc-ccp.com.
The program allows farmers to bid for money from the fund to finance closing down their operation. It will be administered by the CPC.
Interested producers will use the registration form to describe their operation.
They will be issued a “bid form” that will allow them to submit a request for money when the first “auction” is held, likely in late October.
Applications will be judged on the impact the payment would have on reducing over-capacity in the Canadian hog industry.
Stordy said there will be a series of auctions for the available money and farmers whose bids are rejected in the first round will be eligible to submit requests in future rounds. Auctions will end when the federal fund is depleted.
He said the pork council hopes producers consider the loan program before they apply for money to leave the industry.
The exit money will be available to all types of hog operations. It will be retroactive so producers who emptied their barns after April 1, 2009 will be eligible to apply.
