UPDATE 1-Maple Leaf Foods sees higher meat costs lasting

* Farmers’ losses not sustainable-CEO

* Hog futures up 84 pct since August
(Adds details, share price)

WINNIPEG, Manitoba, May 19 (BestGrowthStock) – Higher raw meat
costs for packers appears to be a long-term trend as Canadian
hog farmers struggle to recover from money-losing operations,
the head of a leading Canadian hog processor, Maple Leaf Foods
(MFI.TO: ), said on Wednesday.

“We actually think it is a new normal,” said president and
CEO Michael McCain at the BMO Capital Markets Agriculture,
Protein & Fertilizer Conference in New York. “Higher protein
costs are here to stay, they’re not going to go backwards for
the foreseeable future.”

Hog producers were losing C$40 ($38) per pig in 2009, a
situation that’s not sustainable, McCain said.

Canada’s farmers are sharply reducing the size of their
herds as a higher Canadian dollar, volatile feed costs and a
reduction in U.S. demand for live hogs due to the U.S.
meat-labelling law have caused them to lose money.

Rising raw meat costs, along with a weak performance from
Maple Leaf’s bakery business, caused its first-quarter profit (Read more your timing to make a profit.)
to miss expectations last month. [ID:nN29245536]

Nearby Chicago live hog futures (LHc1: ) have jumped 84
percent since August 2009 amid shrinking supplies.

Maple Leaf’s process of adjusting its prices to higher meat
costs will take one to three quarters, McCain said.

The company’s shares on the Toronto Stock Exchange were
down nearly 1 percent around midday on Wednesday.

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($1=$1.05 Canadian)
(Reporting by Rod Nickel)

UPDATE 1-Maple Leaf Foods sees higher meat costs lasting