High Feed Prices Push Saskatchewan Hog Farm to the Edge
By Jean-Paul McDonald, Farms.com
Big Sky Farms of Humboldt, Saskatchewan, has gone into receivership due to the skyrocketing costs of animal feed, stemming from persistent drought conditions in 2012 across much of North America. The company produces approximately one million pigs annually, which makes up about 40% of Saskatchewan’s total hog production.
Established in 1995, Big Sky Farms is Canada’s second largest hog producer and has encountered trouble in the past over high feed costs. The company filed for bankruptcy protection in 2009 after a similar situation with feed prices, but managed to restructure its business and stay afloat. It’s speculated that with the current feed prices being where they are, the company is potentially losing $40 to $50 on every hog they send to market, which is clearly an unsustainable model. This also causes concern if the market were to be flooded by hog producers liquidating their herds, which could result in lower U.S hog prices, making it harder for Canadian hog producers to compete in global markets.
The company has no current plans to lay-off any staff or to liquidate their pig inventory. This has certainly been a tough year for Canadian hog producers, and many have been left with few options. Under receivership, the receiver would ensure that there are adequate funds to feed the pigs and keep them healthy.