ID 115344593 © Samarn Plubkilang Dreamstime.com

By Alice McFarlane

Olymel Barn Closures

Oversupply of pork and low prices behind recent shut down of hog operations

Jun 6, 2023 | 3:59 PM

It’s always unfortunate to hear of a hog barn closing anywhere in Canada.

That from Saskatchewan Pork Development Board general manager Mark Ferguson on Olymel’s decision to shutter five operations.

Reacting to Olymel’s recent closures of sow units in Quebec, Alberta, and Saskatchewan, Ferguson said the actions are the result of extremely tight margins in the hog industry both today and what’s been going on over the past few years.

“From what I understand these are temporary depopulations that are just meant to be in effect until the industry returns to more profitable times,” Ferguson said. “So, ultimately, we think all these units will be eventually repopulated.”

The pork industry has also been dealing with tight feed supplies and high feed costs since the 2021 drought. Lean hog futures have declined about 30 per cent since March. Ferguson said this has led to many hog operations to reconsider their future and prepare for what looks to be a difficult fall ahead.

Gene-edited livestock feed

CFIA says gene-edited livestock feed is safe

May 08, 2024

seeding

Lack of moisture allows some Sask. farmers to begin seeding early

Apr 25, 2024

FCC Agrispirit fund

AgriSpirit fund supports rural communities

Apr 24, 2024

“All in all, Olymel is not alone in terms of the financial pressures they’re facing. North American pork prices aren’t strong right now. There’s an oversupply of pork globally,” he said “Processors have tight margins and it’s putting downward pressure on hog prices as a result.”

The closures meant Olymel is cutting about 80 jobs as it reduces its hog production in Western Canada.

While Ferguson hasn’t reached out to any affected Olymel staff in Saskatchewan, he’s hopeful they can bounce back.

“We do have thoughts for sure with the affected workers. Something like this is never easy. However, I’m certain the people involved will be able to find new roles in the industry, whether that’s with Olymel or another company,” Ferguson said.

Demand for workers in all of agriculture is extremely strong, and it’s remained extremely strong with hog operations as well, according to Ferguson.

“Experienced stock people and managers are always in high demand so I think there will be a place for anyone that’s affected,” he added.

Farm Credit Canada (FCC) has responded by offering support for the hog sector in eastern Canada, including deferred payments for six months to one year. Ferguson said he’s sure many hog producers are already customers with FCC.

“They may be offering individual support to those farms already. We would obviously be very interested in learning more about what this kind of support might look like in terms of the interest rates and how that relationship would be different or help beyond the regular client-bank relationships,” Ferguson said.

Olymel said closing the sow units will reduce its western sow herd to 40,000 from 57,000.

–

alice.mcfarlane@pattisonmedia.com

On Twitter: @farmnewsNOW