The For Sale sign isn’t out yet but the Saskatchewan government will eventually sell its majority shares in the province’s largest hog producer, Big Sky Farms.
Enterprise and Innovation minister Lyle Stewart said taxpayers shouldn’t be involved in a high-risk investment to such an extent.
The government holds 62.5 percent of the equity in the company.
“In my view, that’s ridiculous,” Stewart said. “It’s just not the government’s place.”
The former NDP government made several investments in the Humboldt-based company. At the end of 2006, the investment through Investment Saskatchewan totalled $29.3 million.
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Stewart said the company has been successful and should remain so under new ownership.
“We’re in no rush to divest of this thing,” he said, adding a sale would take place when returns to taxpayers are good.
The sale would also send a message to other existing and potential hog companies that the government won’t favour one over another.
Big Sky was incorporated in 1995 when Florian Possberg began an aggressive expansion of his own hog production business. It now has about 47,000 breeding sows and markets more than one million hogs annually.
The government invested as the agriculture department was aggressively promoting value-added businesses and set a goal of tripling hog production to take advantage of the province’s space and feed availability. Production rose but the goal wasn’t reached.
Operations established by the former Saskatchewan Wheat Pool and Quadra Group ran into difficulty and were sold.
Slaughter plants in Saskatoon and Moose Jaw have been closed.
The downturn in the hog cycle has resulted in hogs from operations across Canada being shipped south for finishing and slaughter.
Stewart said despite those difficulties he believes the industry and Big Sky have a future.
“It’s a good company,” he said. “It will have good value when the hog cycle turns around.”
