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Coharie Files for Bankruptcy

by 5m Editor
11 November 2009, at 7:26pm

NORTH CAROLINA, US - Coharie Hog Farm has declared bankruptcy, blaming high feed costs and a fall in the global demand for pork.

A pig farming company founded by former US Senator Lauch Faircloth in 1972 is in danger of going out of business amid the crisis in the pork industry, according to Fayetteville Observer.

The company, Coharie Hog Farm, declared bankruptcy on 6 November.

In court papers, the company says it will attempt to reorganise and continue operating but if it cannot obtain sufficient credit to continue operating, it will liquidate.

The Sampson County company employs 170 people, plus it hires 101 farm families in North Carolina and Indiana to raise hogs. It says it produces 190 million pounds of pork annually. It was listed this year as the 22nd largest hog-producing company in the nation by Successful Farming magazine.

It is now operated by Lauch Faircloth's daughter, Anne B. Faircloth, and Nelson Waters.

A bankruptcy document says the company lost $13.3 million in 2008 and so far this year, it has lost $17 million. It blames its losses on record-high feed costs coupled with depressed national and world demand for pork in the wake of the spread of the H1N1 virus.

Documents say the company has more than 450 creditors, with about $50 million in secured debts and $8 million to $10 million in unsecured debts.

Farmers who produce feed for Coharie complained last month that they were not paid.

"During the past few months, Ms Faircloth has provided millions of dollars to the debtor to fund operations," the court document says. "However, the continued negative projection for feed and pork prices does not permit the debtor to project other than significant losses for the future, and the debtor and its owners cannot sustain or continue to fund the negative cash flow any longer."

Fayetteville Observer reports that Coharie's bankruptcy comes amid an economic crisis that has gripped the pork industry for nearly two years. Even before the global recession took hold in 2008, pork farmers were losing money because feed prices rose dramatically in 2007, said Kelly Zering, a professor who studies the hog industry for North Carolina State University.

Several other hog farms have declared bankruptcy this year, according to the Triangle Business Journal newspaper, including Perfect Pig, which also is based in Sampson County.