The cuts will mean an annual loss of over $25 million to the Manitoba economy and will push many of the province's horse ranchers out of business.
"This will have a huge economic impact on the province and on those producers who will no longer be in business," said Agriculture Minister Rosann Wowchuk. "When you invest that much in an operation and then find there is no longer a market for it, it's a significant blow."
Drug giant Wyeth Organics uses pregnant mare's urine to produce Premarin -- a hormone replacement therapy that alleviates hot flashes and sleeplessness in menopausal women.
Friday, Wyeth officials met PMU farmers in Manitoba, Saskatchewan and Alberta to announce it will reduce the number of ranchers who produce PMU by one-third.
Manitoba is home to the largest concentration of PMU farms. Of the 419 PMU farms in North America, 243 are in Manitoba.
Last year, PMU production from 22,000 mares contributed $58.4 million to Manitoba's economy, not including another $23 million that came from the sale of the pregnant mares' foals.
But recent studies have shown the hormone-replacement therapy increases the risk of cancer and heart disease in women who take the drug.
As a result, demand for Premarin has dropped and Wyeth is scaling back its operation, including its production plant in Brandon.
Just three years after spending $3 million to add to the Brandon plant, Wyeth announced it is reducing production at the facility. The company has not laid off any of the nearly 85 full-time employees at the plant, but will not hire the 30 seasonal workers usually brought on at this time of year.
Marguerite Lussier, who runs a PMU ranch near Ste. Rose du Lac with her husband, Jim, said she's not sure if her 132-mare operation will be axed.
She said she and her husband went into the PMU business 12 years ago as a means to diversify their farm and take advantage of their love of horses.
She said Wyeth's announcement worries them.
"This will definitely impact our economy," she said. "Of course we're concerned."
When the PMU industry first made its way to Manitoba over 10 years ago, ranchers found themselves at the centre of an animal-rights controversy.
Animal-welfare advocates argued PMU ranches were inhumane because the pregnant mares were confined to small stalls, unable to lie down or exercise. Rubber sacks used to collect the urine and its estrogen -- the main ingredient in Premarin -- caused sores on the animals. The foals born to the pregnant mares were often sold as horse meat within months of birth.
But Vicki Burns, executive director of the Winnipeg Humane Society -- once a vocal critic of the practice -- said the industry evolved over the last decade and living standards for the animals improved.
Still, Burns said, she's pleased to see the reduction in production of pregnant mare's urine.
"I sympathize with the ranchers but it's important to look for alternatives," she said. "More and more women became concerned with the fact that animals were involved and the added weight of the new health concerns about the drug has made people take a second look."
Theodora Samiotis, spokeswoman for Wyeth, said the company is honouring all contracts it has with ranchers through 2003/2004.
Wyeth is offering to reimburse ranchers for the cost of West Nile Virus vaccines and will provide financial compensation to those ranchers who will no longer be needed.
Samiotis said the amount of compensation will depend on the size of the ranch and the contract the rancher had with Wyeth.
Money will also be provided to producers to help them feed and care for the horses until new markets can be found for them.
But for ranchers like the Lussiers, the announcement means they may not leave their kids the lucrative operation they had hoped to be able to pass on.
"Ours is a family farm that has been in the family for 100 years," said Marguerite. "We switched to PMU because we saw a future in the horse industry. We knew things could change when we went into this 12 years ago. We'll have to adjust."