Harper Government invests in study on hog pricing

Jul 13, 2015

Study will look at a hedging program

In an effort to maintain hog price stability and assist with costs associated with hog producers, the Canadian government is investing in the Canadian Pork Council.

The investment of about $169,530 will be used by the Canadian Pork Council to explore if a hedging program is a viable option. Their study would assess the ever-changing hog pricing markets and its impacts on producers. The study will also include consultations with producers, financial entities, packaging facilities and other risk management services.

Pigs

The new investment is a welcome sight to hog producers.

"Hog producers face a combination of production, market and financial risks that can undermine the success of a farm without a range of risk management tools and strategies,” said Bill Wymenga, Vice-Chair of the Canadian Pork Council in a release. “This project will explore the feasibility of a program that can mitigate the risk of margin calls so that hedging becomes a useful and used business risk management tool."

Hogs are Canada’s fourth largest agricultural commodity with most of the production taking place in Quebec, Ontario and the Prairies. In 2011, hogs produced $3.9 billion in cash receipts.

Hog producers can see volatile market activity and the Canadian government says this investment can assist swine farmers in coping with the market changes.

"Our government is proud to support the hog industry’s efforts to analyze the potential of new instruments, like a hedging program, that would help protect producers against fluctuations in market prices,” said Bev Shipley, Member of Parliament for Lambton-Kent-Middlesex. “Investing in programs to reduce risk adds stability to the hog sector and will help boost competitiveness and profitability."

Join the conversation and tell us your thoughts on the Canadian government’s investment into the hog industry. What kind of findings do you think will be discovered through the study?

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