Advertisement

Sask. seeks exit from Big Sky hog business

| 3 min read

By Alana Vannahme

(Resource News International) —Crown corporation Investment Saskatchewan Inc. (IS) is looking to sell its majority shares in Big Sky Farms Inc. at Humboldt, Sask., according to a Saskatchewan Party official.

“It is part of our medium-term plan to sell this asset [Big Sky] when taxpayer returns can be maximized. That is our goal at the present time,” said Lyle Stewart, Saskatchewan’s provincial minister of enterprise and innovation. “It’s certainly not our intent to be the majority shareholder for long.”

Big Sky Farms is one of the largest hog operations in Canada, with roughly 50,000 sows in production. It owns 44 production units in Saskatchewan, with an additional three in Manitoba. The company, as it currently exists, was created in 1995 by Florian Possberg, Mike Deutscher, Dr. Jim Sawatsky and Dr. John Harding.

The province’s involvement in Big Sky Farms began in 2000 under the previous NDP government when IS decided to invest in the expanding hog production company. Its investments in Big Sky, as of Dec. 31, 2006, were valued at $29.3 million, making it the majority shareholder.

Stewart said he did not know what the original rational was behind the government’s decision to invest in Big Sky, nor did he wish to speculate as to whether or not IS intended to become the majority shareholder.

“We don’t think investments like this are good homes for taxpayers’ dollars but in any event, the previous government made the investment and we hold the asset now,” Stewart said.

He also said talk about selling IS’s share in Big Sky was already taking place under the previous government.

“Things have changed,” he said. “It is my understanding that even the previous government had been looking at disposing of this asset when the time was right.”

When asked if there are parties interested in purchasing IS’s share in the company, Stewart said the government was not actively looking for buyers. He emphasized instead that the government would wait until it felt taxpayers would receive a good return on their investment.

“We’re not actively looking for buyers at this time. Maybe when prices turn around, and the futures markets suggest they might this summer, that would be the time to start the search,” he said.

Stewart explained that because of the crisis currently facing the hog industry due to high feed values, a strong Canadian dollar and low hog prices, offers made at this point in time would likely be below market value. He said they were not interested in “low-ball offers.”

Critics of IS’s role in Big Sky are expected to welcome the news. Jim Long of Genesus Genetics at Oakville, Man. recently called on the Saskatchewan government to “get out of hog production.”

“It’s bizarre that the government would be competing with basic agriculture. It’s wrong and socialistic,” Long said.

Long also questioned Big Sky’s business model of sending weanling pigs to the U.S. to be fed and finished, saying that it did not match IS’s stated mission “To support the growth of the provincial economy by investing in Saskatchewan businesses and achieving a risk adjusted return on those investments.”

“The original business model was to produce pigs in Saskatchewan, to feed them there. Now their business model is moving them to Iowa to finish. How does moving a 12-lb. pig to Iowa benefit Saskatchewan? A pig eats approximately 80 per cent of its feed from 12 lbs. up. How does taking 80 per cent of the feed utilization to Iowa help Saskatchewan producers?” Long asked.