Members of a new producers' network in Quebec will get La Coop Federee's first-ever patronage dividend to be paid directly to hog farmers.
Coop Federee, the province's largest agrifood company and the owner of meat packer Olymel, on Monday announced it would pay out special dividends directly to members of the Filiere porcine cooperative, which was set up last April with 141 hog farmer members.
"This distribution of the financial surplus takes into consideration the importance of pork production and its economic spinoffs," such as genetics, animal feed, transportation, energy, hardware, grain marketing, slaughtering and processing, to the co-op network, Coop Federee said in a release.
"This decision also reinforces the desire of La Coop Federee to stand united with pork producers during this turbulent economic period."
Coop Federee didn't say how much of a dividend a member of the Filiere could expect, but noted its overall dividends to members and affiliates for the year ending Oct. 29, 2011 will total $36.5 million, triple the $11.5 million paid out the previous year.
Coop Federee on Monday booked overall net earnings for the 2011 fiscal year of $79.02 million on $4.55 billion in gross revenue, up from $36.08 million on $3.95 billion in fiscal 2010.
Its 2011 performance, it said, was "mainly due to gains in the pork sector, where sales increased by $97 million."
Coop Federee credited strong demand from China and Russia and the fallout from the foot-and-mouth disease outbreak in South Korea for the increased revenue, which offset lower sales into the U.S. due mainly to the stronger loonie. The co-op also noted an increase in sales in Western Canada, where Olymel operates a major pork plant at Red Deer, Alta.
The Filiere's members, benefiting from a "close working relationship" with processors on product specifications, "continue to improve meat quality and texture that better responds to the demands of the most lucrative markets," Coop Federee said.
"Moreover, the efforts of these players in the value chain have allowed it to consolidate the Japanese market: the door has been opened for the expansion of these value-added exports."
The Filiere's members include farrowing, finishing, farrow-to-finish, nursery and nursery-finishing operations. The resulting products "combine the know-how of agricultural producers, the expertise of La Coop Network and the experience of Olymel, especially in the area of marketing," Coop Federee said.
"This is a sign that the sector is turning around, and that's good news," David Boissonneault, president of the Federation des producteurs de porcs du Quebec (FPPQ), the province's general hog farmers' group, said in a separate release Thursday. "But some pork producers are still in a delicate situation. Not everyone has enjoyed this increase in income."
"Debt levels remain high for many pork businesses, production is in decline and many producers have been forced to turn to programs set up by (the provincial ag ministry) to improve their situation or even save their farms," FPPQ said.