SWP Plans to Exit Hog Business

REGINA - Mar 12/04 - SNS -- The Saskatchewan Wheat Pool (SWP) intends to sell its interests in the pork industry and exit that side of its business.

The Pool owns three hog operations in Saskatchewan and is the majority shareholder in four community-owned barns. In fiscal 2003, these pork operations marketed 360,000 hogs in total.

"The pork industry has been under significant pressure for some time, primarily the result of the prolonged cyclical downturn, the strengthening Canadian dollar and increased domestic consumption of beef in response to BSE," Pool CFO Wayne Cheeseman noted.

"As the Pool has indicated in the past, we see our investment in the pork businesses as non-core . As such, we are not willing to continue to absorb the losses and accept the business risk while we wait the industry cycle out."

The Pool is actively engaged in a divestiture process and hopes to conclude that process over the next few months.

The hog projects, constructed between 1998 and 2000, are farrow-to-finish operations and typically consist of clusters of production-specific barns, through which the hogs are moved as they are born, weaned and raised to market weight.

"The Pool, through its investment in these pork businesses, helped to diversify the agricultural economy and stimulate local investment and employment," Cheeseman noted. "However, our focus is now on our core operations and it is important that we devote all of our resources to maximizing competitive opportunities for those businesses."

The Pool will be announcing its second quarter results in late March and, at that time, expects to record a write-down of its investment in the pork industry.

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