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Producer Retirement Program funded by membership dues

By Jean Caspers-Simmet

simmet@agrinews.com

The Producer Retirement Program, open to sow producers, is funded by membership dues of $20 per sow paid up front or $5 per sow up front with the balance supported by a letter of credit, says Chuck Wirtz, chairman of the PRP board and a Whittemore pork producer, during last week’s webinar explaining the program.

PRP will be web-based as much as possible to reduce administrative costs. Documents to join the PRP should be on the program’s Web site www.producerretiremenprogram.org this week. Memberships are due by July 10.

"We want to reach any and all producers," Wirtz said. "We believe the whole process needs to be expedited rapidly because of the situation the industry is in."

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Allied industry can support PRP as non-voting members. Wirtz hopes that enough money is raised from allied industry to pay the program’s administrative costs. That way all money paid by sow owners can go toward compensating producers who send sows to slaughter.

Paid members are free to bid out their entire sow operation or one particular unit. Units bid into the program must cease operation for at least two years. Producers bid the amount they want to receive over the cull market for their sows.

Bids can be submitted until July 17. The bids will be verified to make sure they are legitimate and will be awarded beginning on July 24 with the lowest bids awarded first. Wirtz said they plan to take the sows in a orderly fashion so that they don’t swamp the sow market.

Premiums will be paid on sows and bred gilts. Unbred gilts will be sold to the butcher market.

Wirtz encourages all sow owners to join PRP. Even if they don’t plan to bid in sows, it’s to their benefit to support the program.

Mark Greenwood, vice president of agri-business capital at AgStar Financial Services, said he has talked to packers, and they support the program.

"The only way for a packer to have a positive margin is if the producer has a positive margin," Wirtz said. "If the pie is not big enough, everyone goes home hungry."

A field audit will be conducted to confirm the number of sows a producer bids. When the sows have been sold to the packer, producers will provide copies of sow buyer receipts. There will be an audit to confirm liquidation has been completed and then audits on the first- and second-year anniversaries to verify that the producer hasn’t re-entered sow production.

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Producers will receive 70 percent of their money on verification that all sows have been liquidated. Another 15 percent will come one year later and the final 15 percent on two-year anniversary.

If producers decide to alter their retirement plans and use a retired facility for farrowing or breeding within two years, they must return funding with interest.

PRP has contracted with Insight Enterprise Consulting of New Ulm, Minn., for general management and policy services and with Value Added Science & Technologies of Mason City, Iowa, for administrative and recordkeeping services. PRP’s legal team includes Mike Fayee of Chicago, Gary Koch of New Ulm, and Eldon McAfee and Mike Blaser of Des Moines.

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