WINNIPEG – In five years, Heartland Livestock Services plans to produce a million hogs a year in large-scale integrated barns across the Prairies.
Heartland general manager John LaClare told the annual meeting of Manitoba Pool Elevators here last week the company wants to help build several $11.8 million hog operations.
Heartland Livestock plans to use the alliance farm system, a model from a U.S.-based farmer co-operative, LaClare said.
“It is the intention of the company to work with communities and producers to provide them the advantage of large-scale integrated production,” LaClare told delegates.
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He encouraged Manitoba Pool to get involved with the efforts. Earlier at the meeting, delegates talked in a closed session about getting into the hog industry. Manitoba Pool owns 20 percent of Heartland and Saskatchewan Wheat Pool owns the rest.
Sask Pool has said it will get into hog production. LaClare said the co-operative believes “Heartland is the best vehicle to do that.”
LaClare would not talk to reporters about Sask Pool’s plans. But he told delegates Heartland plans to work with communities, investors and farmers on hog production systems each having three specialized sites.
- Farrowing and gestation barns for 2,400 sows.
- Two nursery units to serve the barns.
- A series of finishing barns to accommodate 1,000 to 8,000 hogs.
LaClare said Heartland will provide swine management services, and the operations will use the same genetics and feeding systems. The company also plans to become a dealer for National Pig Development so it can sell breeding stock.
Types of ownership
LaClare said the company is open to a variety of ownership arrangements for the hog operations. He said shareholders, including Heartland, community groups and farmers, could own the entire operation. Shareholders would need to raise about $6 million in equity, with half coming from Heartland or the pools.
However, individual farmers could own their own finishing barns separate from the rest of the company. Shareholders in the farrowing and nursery sites would raise about $3.5 million in equity, with half coming from Heartland or the pools.
Another proposal would allow a group of farmers to set up a closed co-operative if they raised most of the capital needed for the project. Heartland would be a minority partner.
LaClare said producers and communities wanting to get involved have already contacted Heartland. The operations will create eight to 15 specialized jobs, depending on whether feeding is done by individual farmers.
The two pools will likely have to inject some equity into Heartland to help it put $1.8 to $3 million in each operation, LaClare said.
Ken Sigurdson, a delegate from Swan River, Man., asked LaClare whether Heartland was getting into the kind of vertical integration that American farmers often complain about.
“Really, the whole philosophy of a co-operative has been that we try to maintain the independence of individuals,” Sigurdson said.
LaClare said he’s convinced the hog industry across the world is becoming more vertically integrated. With help from Heartland and the pools, farmers may be able to reap some of the benefits of large scale production, he said.
