Market conditions leading one of Canada’s major pork packers to cut operating days at its flagship western Manitoba plant aren’t likely to improve soon, the province’s hog producers warn.
Toronto processor Maple Leaf Foods has announced it will cut one processing day per month from the schedule at its Brandon, Man. plant for the next five months, the Manitoba Pork Council reported Tuesday.
Council chairman Karl Kynoch of Baldur, Man. described Maple Leaf’s plan as a temporary “brown-out” due to a lack of market hogs, and warned the situation “will not improve until producers build more barns to produce market hogs.”
A Maple Leaf spokesperson was not immediately available for comment Tuesday.
The company said May 1, however, that pork markets had been “impacted in an unprecedented way” due to the arrival of porcine epidemic diarrhea (PED) in the U.S. hog herd, a viral disease believed to have killed as many as seven million nursing piglets in the U.S.
Maple Leaf CEO Michael McCain said the effects of PED had “renewed pressure from a sharp rise in raw material costs” in its first quarter ending March 31, but the company would accelerate price hikes in the second quarter to recover its margins.
McCain said the company expected the effects to be “transitory, as the industry is forecasting a return to more normal conditions later in 2014.”
PED has been seen in hogs on over 6,600 U.S. farms across 30 states since the virus arrived in that country early last year. It’s been seen in hogs also on 62 farms in Canada, including two in Manitoba and 58 in southern Ontario, since it arrived in Canada in January.
Manitoba’s hog producers will invest in new barns, Kynoch said in a council release Tuesday, but the province’s current environmental regulations are “killing” that investment opportunity.
The Manitoba government in 2008 imposed a freeze on new hog barn developments and/or expansions in three areas of the province, including southeastern Manitoba’s “hog alley,” a special Red River “management zone” including Winnipeg and the surrounding capital region, and the Interlake region between Lakes Winnipeg and Manitoba.
The province extended the moratorium indefinitely following a report from the provincial Clean Environment Commission on the hog industry’s sustainability, recommending the province move to balance “nutrient production… with the environment’s ability to remove those nutrients.”
The freeze allowed for expansions on farms that introduce technologies such as anaerobic digesters and a combination of separators and other systems that “enhance environmental protection.”
“The number of market hogs could be increased, as we have the sow base and the processing capacity to take the pigs,” Kynoch said Tuesday. “But we need some help to lever more private capital investment on-farm, and for government to stop forcing regulations, which discourage investment and do nothing for the environment.”
The hog sector, he said, has “better technologies that protect the environment, but are more cost effective for producers.”
The council said it’s been meeting regularly with the province and processors for the past five years “to resolve the challenges of insufficient market hogs not matching processing capacity.”
The council and processors have developed financial packages which it said would lever new private capital investment at the farm level, “with some short-term support from government,” the council said Tuesday, noting it met last week in Ottawa with government and industry officials to explain the proposed “core programs.”
Those programs, Kynoch said, “would bring in millions of dollars of new investment, and create thousands of new jobs.” — AGCanada.com Network