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Tuesday, July 21, 2015
Canada funds study to explore price hog hedging program
The Canadian government is investing up to $169,530 to the Canadian Pork Council (CPC) to explore the feasibility of developing a hedging program that would offer price stability and address the cash flow needs of Canadian hog producers.
This support will enable CPC to study the risks and impacts of hog market price fluctuations on producers, and explore the potential of developing a hog hedging program to mitigate that risk. Under the project, consultations will occur with producers, financial institutions, packing plants, and organizations providing risk management services to producers for their assessment of this risk.
"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. Investing in programs to reduce risk adds stability to the hog sector and will help boost competitiveness and profitability," said Shipley.
CPC applauded the government’s support.
"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, CPC vice chairman. 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."