Canadian pork producer Big Sky Farms enters into receivership

Canadian pork producer Big Sky Farms, which ran into financial trouble due to high feed costs, has entered into receivership and may be put up for sale.

Feed costs in Canada have soared due to severe drought in the US.

The company said that feed costs have jumped from C$75 ($76.95) per hog to C$120 ($123.12), which is a record high.

In addition, producers are shipping the animals to the market early in order to offset the higher feed costs, which has lowered hog prices and further affected the hog industry.

Big Sky president said Casey Smit said that due to these two factors, the company has been losing about C$40 ($41.04) to C$50 ($51.30) on every hog that is being sent to market.

According to Sask Pork, which represents the pork industry in Saskatchewan, the company will continue to function for now, with no plans to liquidate its pig inventory or cut jobs, and the receiver will provide financing to ensure there is enough feed for the pigs, reported Reuters.

Established in 1995, Big Sky is a leading producer and processor of pork in Canada, producing 1 million pigs per year, and the company accounts for about 40% of total hog production in Saskatchewan province.

It has operations in Saskatchewan and Manitoba and supplies to meat packing facilities operated by Maple Leaf Foods and Olymel.

The company was in similar financial trouble in 2009, when it filed for bankruptcy protection blaming high feed costs, US trade barriers and a high Canadian dollar, following which it undertook a restructuring of its business.