Can the World’s Largest Government Owned Farm Survive

big sky blockadeBased on the economic turmoil that the hog industry has been in over recent years, it is no surprise that barns have been de-populated and the industry has retrenched.  One of the major events in recent months has been Big Sky Farms entering creditor protection.  Big Sky is the largest hog operation in Saskatchewan and to say this is a large story in the Canadian hog business is an understatement. Losing $40 million in the last 25 months and owing $96 million to creditors creates some real interesting speculation and commentary. 

I talked to Kevin Hursh of Hursh Consulting and Communications Inc about the background of the story, what is being done for the creditors and how has the curious ownership structure made this very complicated.

Kevin Hursh – Discusses Big Sky Farms – $96 Million Creditor Protection of the World’s Largest Government Owned Farm
[audio:http://realagriculture.com/wp-content/uploads/2009/12/Kevin-Hursh-Big-Sky-Farms-Dec-8-2009.mp3]

With the Saskatchewan government owning 2/3 of the company (world’s largest government owned farm), many grain farmers (unsecured creditors) are putting a lot of pressure on the provincial government for payment.  This included a recent blockade at a company feedmill.  The former NDP government made the investment which seems to be against some of the anti-corporate sentiment of the party.  So now the conservative government who inherited this issue has to clean up the mess of the former government and the company. 

The founder of Big sky was quoted in the Western Producer on Nov 26, 2009 stating that he is optimistic the company will come out of creditor protection and be viable in the future.  Many are wondering how this could be possible based on the terrible financials in the hog industry, COOL  a high Canadian dollar and the $96 million dollars of debt.  In my opinion this is a real no-win situation for the Saskatchewan government in the fact they will have to honor the amounts owing to some of the unsecured creditors.  This would include the grain farmers who delivered grain and continue to do so through the creditor protection.  At the same time the government has already sunk tens of millions into the business and when is enough enough?  Exclude the government ownership issue and you are looking inside many hog operations in North America.  As Kevin Hursh told me in the above interview, this is not an example of bad management but more an example of the real struggle the hog industry continues to fight through.

Click here to review the court documents which includes the affidavits and creditor listing.

 

Shaun Haney

Shaun grew up on a family seed farm in Southern Alberta. Haney Farms produces, conditions and retails wheat, barley, canola and corn seed. Shaun Haney is the founder of RealAgriculture.com. @shaunhaney

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One Comment

Martin Hofer

I’m A hog farmer and we have pretected ourself with a good profit and we only have a 450 farrow to finish operation. But I’m surprised that Big Sky didn’t take that opportunity

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