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Hog Sector Facing Infrastructure Dilemma

A focus on short-term survival for the last five years has left the hog industry facing a major infrastructure problem, according to the chair of the Manitoba Pork Council.

Karl Kynoch told attendees at the organization's annual meeting in Winnipeg yesterday that only four new hog barns were built in the province between 2008 and 2013. That's nowhere close to the 20 to 30 new barns the pork council estimates need to be built each year to sustain the pork sector in Manitoba.

"We've had a real challenge over the past number of years not getting barns replaced. The infrastructure is getting older. A lot of these barns were built in the 90s and are getting to be 20 years old with a life expectancy of around 30 years," he said. "We have the challenge of having the cash to be able to replace them, as well as the moratorium, so producers actually can't build. The regulations that we have restrict any building."

Producers have benefited from record high hog prices over the last few months due to a North American hog shortage, but lenders are still reluctant to invest in pigs as producers are still carrying heavy debt loads after years of low or negative margins.

"The confidence from the banking industry is not there due to the low prices. There have been a lot of challenges with just being able to pay down debt," noted Kynoch.

The pork council has asked both the provincial and federal governments for help with offering a hog producer loan program that provide producers with capital to make longer-term investments.

"We got turned down by the province, so right now we're trying to work with the feds," he said. "Our goal is to get everybody together to share the risk, replace some of these barns and create a lot more jobs."

The second major obstacle preventing investment in new or upgraded hog facilities is the province's environmental regulations.

"Before we can build we're going to need to resolve some of the issues with environmental regulations. Right now it would not matter, we simply cannot build," said Kynoch. "We need to work with government to resolve it and come up with ways so that they still achieve their goal and still allow producers to continue to expand their operations."

He's hopeful the province will relax the hog barn moratorium and some of the environment-related rules governing hog production.

"We've been working with the Department of Conservation for quite a while and I think we're coming to some agreement, but until you put the pen to the paper and sign off on it, it's hard to say how long that road is going to be," said Kynoch.

Source: PortageOnline


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