Canada’s second-biggest hog producer, Big Sky Farms, has entered into receivership as the North American hog industry struggles under the bruising costs of animal feed. The severe drought in the United States has decimated crops, which has led to higher costs for feed grains. Big Sky Farms, based in Humboldt, Saskatchewan, produces roughly 1 million pigs annually and accounts for 40 percent of Saskatchewan’s total hog production.
Big Sky Farms Chief Executive Casey Smit was quoted as saying in an interview with the Manitoba Farm Journal that because of the drought driving up feed costs, Big Sky was losing C$40 to C$50 on every hog it sends to market. “It really leaves the company with very few options,” he said.
Corn, barley and wheat prices are leading many North American hog farmers to liquidate their herds and send more pigs to slaughter, resulting in lower U.S. hog prices, said Neil Ketilson, general manager of Sask Pork, an industry group run by hog farmers. “It’s all about the drought in the U.S.,” he said. “If it hadn’t been for that, I think the guys would have been just fine.”
Under receivership, an outside party controls a company until it can restructure its debt or be sold. It was reported that the company would operate for now with no plans to lay off staff or liquidate its pig inventory.
If Big Sky, established in 1995, were to liquidate its herd, the broader Western Canadian hog industry would be hit hard, including feed mills, truckers and hog processors. Big Sky is one of the suppliers for packing plants owned by Maple Leaf Foods and Olymel. Canada is the world’s third-largest pork exporter.
