REGINA - Saskatchewan-based Big Sky Farms, the second-largest hog producer in Canada, is filing for bankruptcy.
Big Sky CEO Casey Smit says the pork industry has been facing some hard times due to a major drought in the United States.
He says it has impacted feed costs, putting them at record highs.
He says traditionally feed has cost about $75 per hog and now that's reached $120.
The situation has caused producers to ship hogs to market early to try and offset the cost, but that also flooded the market lowering prices.
With those two factors combined, Smit says Big Sky has been losing money at a rate of between $40 and $50 per hog.
Throughout this year it was widely accepted that the U.S. drought would cause feed prices to rise, but nobody seemed to expect it to be this drastic.
"We didn't know how severe it was until the prices were up so high that nobody could do anything about it," said Neil Ketilson, general manager of Sask Pork.
He's not surprised companies like Big Sky are having problems.
"Any time you get a $35 increase in the price of feed, in direct relationship to a weather disaster, it's just something they couldn't bear," he said.
This isn't the first time Big Sky has filed for bankruptcy protection.
They did so in 2009, citing a downturn in the hog market, U.S. trade barriers and a high Canadian dollar.