Olymel announced Friday that CSN-represented workers at the Bacon Inter-America facility, who’d been on strike since May 26, voted 93.6 per cent in favour of the deal. The company said the agreement was proposed by provincial conciliator Diane Larouche.

Olymel said Friday the size of the vote in favour of the deal will allow for “a serene resumption of plant operations from the beginning of next week, after verification of the availability of the raw material” — that is, pork bellies.

The company also said it believes the improvements in the agreement “will be a positive factor for the work climate, as well as for hiring and retention of employees.”

The new agreement comes during a particularly unprofitable spell for Olymel, which has already been in deep cost-cutting mode for months. Last fall it cut dozens of administrative and management positions through attrition and layoffs.

Since then, the company has closed three pork further-processing plants in Quebec and has plans in place to shut its hog slaughter plant at Vallee-Jonction, Que. before the end of the year.

Further west, where Olymel operates a major hog slaughter plant at Red Deer, Alta., the company more recently announced plans to dial back its Prairie hog production by idling six company-owned sow units in Alberta and Saskatchewan starting sometime in the next several months.

The workers’ union local, the Syndicat des travailleuses et travailleurs de Bacon Inter-America–CSN, in a separate release Friday, said the deal gives the Drummondville plant’s 500-odd workers a $4.55 per hour wage increase over four years, including $1.75 an hour in the first year.

The deal also calls for a 9.6 per cent decrease in employee contributions to insurance, plus improvements to pensions, the union said.

Pascal Bastarache, president of the Conseil central du Coeur du Quebec–CSN, said in the union’s release that Olymel “had no choice” but to take inflation and shortages of available labour into account, adding that this deal represents “a signal for the other employers in the region.”

The union, in a separate release June 13, cited Scotiabank data showing the average retail price of bacon has risen by about 30 per cent between December 2019 and December 2022.

Melanie Cloutier, president of the Drummondville union, said the plant’s business is profitable, bacon is a growth market and the company “cannot put all of Olymel’s difficulties on us.” — Glacier FarmMedia Network

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Maple Leaf Foods on Thursday reported a net loss of $311.89 million on $4.739 billion in gross sales for its fiscal year ending Dec. 31, 2022, down from net earnings of $102.82 million on $4.521 billion in sales in 2021.

For its fourth quarter alone, the company booked a net loss of $41.49 million on $1.186 billion in sales, down from net earnings of $1.88 million on $1.12 billion in sales in the year-earlier period.

The past year “was clearly a year of unprecedented challenges for us on many fronts, including hyper-inflation, dislocation in the pork markets, supply chain dysfunction, job vacancies and a cyberattack,” CEO Michael McCain said in a release Thursday.

Despite all that, he said, “we have maintained a steady hand on executing our plans including aggressively building our sustainability platform, starting up over $1 billion of new assets and converting our plant-based business model to profitable growth.”

McCain said the company “continue(s) to see an inflection point in our business,” noting the ongoing startup of Maple Leaf’s new poultry processing plant at London, Ont.

The company also expects its nascent plant-based protein business is “on track to get to adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) neutral or better” in the back half of 2023, he said.

The London poultry plant, construction of which was first announced in 2018 for completion in 2021, was delayed into 2022, reportedly due to wet weather and the COVID-19 pandemic. First budgeted at $660 million, the total capital spend on the new plant was pegged in Thursday’s report at $772 million.

By the end of 2023, though, the new London site is expected to have consolidated the work of five of the company’s existing Ontario poultry processing plants, four of which have been slated to be closed.

McCain told analysts on a conference call Thursday that the new London plant is expected to add $100 million to the company’s EBITDA margin on an annualized basis by the end of this year, whether the market dynamic seen in 2022 improves or not.

Another $30 million will be added to that figure during the ramp-up of the company’s “bacon centre of excellence” at its Lagimodiere Boulevard prepared meats plant in Winnipeg, also independent of the market dynamic.

The Winnipeg plant has seen expansions and upgrades in recent years for both bacon and ham processing, as the company consolidated that business from other plants across the country.

Its most recent “bacon centre of excellence” expansions, which included an additional smokehouse, two new pre-cooked bacon production lines and a new line for bacon bits and chips, involved a capital spend of $182 million, the company said Thursday.

Furthermore, company officials said exports to China have now resumed from Maple Leaf’s main hog slaughter and fresh pork cutting plant at Brandon, Man., following their suspension in 2020. The resumption of exports from Brandon to China will be “accretive to our earnings” starting early in the second quarter of 2023, the company said.

Maple Leaf and other companies are expanding back into the Chinese market just as demand for pork there is increasing and the pork supply from European exporting nations is seen to be declining, officials said.

The company said its “inflection point” will see a shift away from “pandemic-induced supply chain instability,” product prices lagging behind the current rate of inflation and a “sustained period of investing over $1 billion in new assets.”

Instead, Maple Leaf said it expects to see a transition this year to “supply chain stability.” Product pricing “to mitigate inflation” will be fully in place, also by the end of the second quarter of this year.

The company is also expecting “normalized” global pork markets, for which it said the “green shoots” are now visible.

“These unprecedented markets will normalize; they always do,” McCain said in Thursday’s release.

Maple Leaf in its fourth quarter also incurred an estimated $23 million in one-time costs from a ransomware attack on its computer systems in November.

The release of Maple Leaf’s 2022 ledger follows a report of losses from another major Canadian pork and poultry packer.

Quebec-based Olymel, the meat packing arm of Sollio Co-operative Group, in February reported a $445.7 million loss on $4.6 billion in sales for its fiscal year ending last Oct. 29. — Glacier FarmMedia Network

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Cam Dahl, who was named GM of the provincial pork organization in February last year after previously working for Manitoba Beef Producers and Cereals Canada, cited two projects he considers to be a boon for Manitoba’s pork industry.

The first was the $182 million, 73,000-square foot expansion of the Maple Leaf Foods plant in Winnipeg. built for packaging pre-cooked bacon and completed last October.

“Those were 350 jobs we were exporting to the United States previously,” Dahl said.

Later this month, Dutch hog breeder Topigs Norsvin will officially open its new nucleus facility named Innova Canada in the Municipality of Westlake-Gladstone, at a site about 100 km northwest of Portage la Prairie. The company’s Canadian headquarters are in Oak Bluff, just outside Winnipeg.

“It’s a $35 million investment and it comes with 35 high-tech jobs,” Dahl added. “These are the kinds of investments that are happening because we have that critical mass of production here. The industry’s growing and maybe there are some bottlenecks that are holding that up, but… we see the demand for the product.”

Worldwide, there is plenty of uncertainty according to Dahl. African swine fever (ASF) continues to threaten pigs in countries including China, the Philippines and more recently in Germany.

“There’s close to $500,000 coming from producers that goes into research on things like protecting ourselves from ASF, working on production diseases like porcine epidemic diarrhea (PED),” he said. “What are the best practices to minimize some of those costs? Research plays a really large part and (we’re) making sure we’re prepared for those large shocks…We’ve come a long way on biosecurity over the last 20 to 25 years.”

Meanwhile, recent COVID-19 lockdowns in China could negatively impact the number of pig exports going to the country and Russia’s invasion of Ukraine is threatening feed grain shipments.

On the Chicago Mercantile Exchange, the December lean hogs contract on Thursday touched 88.25 U.S. cents per pound, its highest price in a month. But while Dahl says prices are strong for Manitoba pork, costs are also high.

“The prices of wheat, corn and soymeal are not cheap,” he said. “We’re not in a drought in the Great Plains this year, but the last couple of years, the drought really did have a significant impact because of the prices people were seeing for feed.”

A porcine epidemic diarrhea (PED) outbreak first detected on Manitoba hog farms last year is slowing down, Dahl said, and he believes the pork industry will continue to grow in the coming months.

“Since 2017, we’ve seen about 40 barns built since (Manitoba’s moratorium on new hog barns) was lifted,” Dahl added. “But there’s that uncertainty and it’s something that comes with the industry and we’ll need to be prepared for that in case shocks do happen.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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The major Toronto meat processor announced Tuesday it had completed a $182 million, 73,000-square foot expansion at its Lagimodiere Boulevard prepared meats plant, to “significantly” increase its bacon production capacity.

The expansion, Maple Leaf said, provides “new in-house capacity for pre-cooked, microwaveable bacon.”

Final commissioning of the expansion is expected to be completed “in the near term” with commercial production ramping up “over the course of the coming months,” requiring another 350 new jobs at the facility, bringing its total workforce to over 1,900 people.

The Manitoba government on Tuesday announced it would put up about $1.9 million under a new two-year agreement with Maple Leaf via the provincial Industry Expansion Program, to help fund skills training for the expanded workforce.

With the expansion, the Lagimodiere plant will become Maple Leaf’s primary pre-cooked bacon production facility — where its pre-cooked bacon has until now been processed by co-manufacturers in the U.S., using pork from Maple Leaf’s primary hog slaughter plant at Brandon, Man.

The Lagimodiere plant was already the single biggest bacon processing plant in Canada, thanks to a major expansion in tandem with sweeping consolidation of Maple Leaf’s further-processing work in the early 2010s.

The company in 2013 and 2014 closed a bacon plant at North Battleford, Sask. and a sliced meats plant handling bacon in Moncton and moved those plants’ work to Winnipeg, where new ham and bacon smokehouses and other equipment were then installed.

Maple Leaf in 2011 said the Lagimodiere plant would become its “centre of excellence” for ham. Provincial Ag Minister Ralph Eichler in 2016 described the plant as a “bacon centre of excellence” following another expansion of its bacon processing capacity — a title Maple Leaf conferred on the plant on Tuesday.

“Our vision to become the most sustainable protein company on earth applies even to our very best convenience food, which includes delicious pre-cooked bacon,” Maple Leaf CEO Michael McCain said in Tuesday’s release.

“This state-of-the-art facility will deliver sustainably-made cooked bacon products from meat humanely raised and without antibiotics, made by a carbon-neutral company. We are really proud of this.”

Moving the pre-cooked bacon processing away from co-packers to the Lagimodiere plant will also help Maple Leaf cut its freight and product costs, the province noted.

“The pre-cooked bacon industry is one of the fastest-growing industries in North America,” provincial Economic Development Minister Jon Reyes said in a separate release.

The provincial funding, he said, “will help Manitoba’s economy to recover from COVID-19, strengthen training opportunities in the meat sector, and support innovation and job creation in an industry that is in high demand.”

“This expansion has the potential to benefit not just our company, but Winnipeg and its residents through good employment opportunities and increased production of nutritious, great-tasting and sustainable products in which we can all take pride,” Iain Stewart, Maple Leaf’s senior vice-president for operations, supply chain and purchasing, said in the province’s release. — Glacier FarmMedia Network

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Olymel, the meats arm of Sollio Co-operative, said Wednesday it will permanently close the bacon plant at Henryville, about 60 km southeast of Montreal, effective Nov. 12.

The closure will affect 29 jobs, Olymel said, and all affected employees will be offered relocation to nearby Olymel facilities in the Monteregie. Employees were notified Wednesday morning at a meeting and by “personalized letter.”

The former Agromex site, a 70,000-square foot facility in operation since 2011, came to Olymel early last year when it bought the pork business of processor F. Menard.

The employees are mostly represented by TUAC (UFCW) Local 501, working under an eight-year collective agreement that was put in place with F. Menard and was to run into 2026.

The Henryville site and buildings “are currently being evaluated, and Olymel will soon make a decision on the future of these facilities,” the company said.

“Closing a facility is always a difficult decision,” Olymel CEO Rejean Nadeau said in the company’s release. “However, after careful evaluation of our capacities and needs in this production sector, we have concluded that the company already has the necessary facilities elsewhere to meet our customers’ demand.”

The costs of continuing to operate the plant “would not have allowed this facility to achieve profitability,” he said.

The company, he said, hopes all 29 affected employees “affected by the closure “will be able to remain with the company in its other facilities in the region, and we’ll do everything to make this happen.” — Glacier FarmMedia Network

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CEO Gilberto Tomazoni said 12 of the company’s plants in Brazil were being expanded, as JBS seeks to double production capacity, by 2024, of its Seara food division, which processes pork and chicken products.

“The strong investment in Seara reflects our confidence in the brand,” Tomazoni said. “Seara products are now in every Brazilian household.”

JBS, which reported a near nine-fold rise in third-quarter net profit, also plans to start production of cooked and pre-cooked bacon at its new Missouri plant in 2021. The facility has capacity to process 11,000 tonnes of products per year.

In the United States, where JBS derives most of its global sales, the company is mulling a US$200 million investment in a facility to produce charcuterie and other cold cuts.

The company is also upbeat on China, which is expected to import more beef from JBS’ plants in the U.S. in the fourth quarter. The Asian country bought almost a third of JBS’ overall meat exports between July and September.

At home, JBS said doubts remain in relation to consumer demand after the end of the government’s COVID-19 cash aid program, which low-income Brazilians spent to buy food during the pandemic.

“It is difficult to gauge the impact of the end of the ‘corona voucher,’ some food categories may be affected,” said Wesley Mendonca Batista Filho, JBS’ director-at-large.

He added in a scenario of food inflation, chicken remains a competitive protein.

— Ana Mano is a Reuters agricultural commodities correspondent in Sao Paulo.

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Wall Street’s three major indexes tumbled on Wednesday and crude oil plunged more than five per cent as a surge in U.S. coronavirus cases intensified fears of another round of government lockdowns and worsening economic damage.

Meatpackers, meanwhile, are still working to whittle down excess supplies that arose when numerous packing plants were temporarily closed due to coronavirus outbreaks among workers.

A quarterly U.S. Department of Agriculture (USDA) report due for release on Thursday is expected to show a 3.7 per cent expansion of the U.S. hog herd in the March-to-May quarter.

Livestock markets slumped as rising infection rates were seen slowing the reopening of restaurants and food service businesses, key outlets for items like bacon and high-end cuts of beef.

“We have a decent-sized backlog of cattle to work through that’s keeping a lid on things, and there’s no real excitement in the boxed beef market,” said Matthew Wiegand, a broker with FuturesOne. “Hog-wise, the concern is that we still have too many ready hogs.”

Chicago Mercantile Exchange July lean hogs fell to within 0.1 cent of a contract low posted on Monday and settled 0.975 cent lower at 45.925 cents/lb. (all figures US$). Actively traded August hogs dropped 1.25 cents, to 51.25 cents/lb.

August live cattle were 0.85 cent lower at 96.35 cents/lb. and August feeder cattle shed 0.325 cent to close at 132.875 cents/lb.

Wholesale boxed beef prices fell for a second straight day, nearing pre-pandemic levels following a spike to record highs. Pork prices bounced after a month-long slide from historic highs.

Meatpackers are facing heightened scrutiny after the unprecedented meat price surges.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.

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Both live and feeder cattle and lean hogs dropped by their daily trading limits for a second straight session, sending most live cattle contracts and all lean hog contracts to new life-of-contract lows.

Beef and pork prices have been falling sharply after a recent surge that was fueled by consumer stockpiling as several U.S. states issued stay-at-home orders and shuttered restaurants to stem the tide of coronavirus infections.

Cash cattle and hog prices have also faded as packers are slowing meat output to closely match weaker demand, and that is backing up supplies of market-ready animals.

“We pulled all this demand forward… Now, the pipeline’s full and not moving like it was,” said Matthew Wiegand, commodity broker for FuturesOne.

Chicago Mercantile Exchange (CME) April live cattle fell to 92.825 cents/lb., while actively traded June futures finished at 83.075 cents, both down by their expanded 4.5-cent daily limit (all figures US$).

May feeder cattle futures ended at 111.65 cents/lb., one of five contracts that ended down the expanded daily limit of 6.75 cents.

April lean hog futures ended at 44.7 cents/lb., down 4.5 cents and the lowest for a spot contract since October 2016. Most-active June settled at 52.825 cents, also down by the expanded 4.5-cent limit.

The trading limits for all three commodities will remain at their expanded levels of 4.5 cents on Friday for live cattle and lean hogs, and 6.75 cents for feeders.

“The bulk of our bacon goes to restaurants and that’s why bellies are as cheap as they’ve been in 20-odd years. We saw the ribs cave in because people aren’t going for barbecue,” Wiegand said.

The wholesale pork cutout value on Thursday fell to $59.21/cwt, down $18.40 in the last week, according to the U.S. Department of Agriculture. Pork belly and rib prices are down nearly 40 per cent in that time.

The choice boxed beef cutout dropped to $232.64/cwt, down $20.93 from a week ago, according to USDA.

Cash cattle at southern U.S. Plains feed lot markets traded $8/cwt lower this week, while hogs in the closely followed Iowa and southern Minnesota market traded more than $7 lower on Thursday alone, USDA said.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.

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The agrifood co-operative announced Tuesday its Olymel and Sollio Agriculture businesses have an agreement in place to buy the hog breeding, pork slaughter and packing, grain sourcing and feed milling operations of family-owned Quebec agribusiness F. Menard.

The deal’s financial terms won’t be disclosed, La Coop federee said — though it noted the deal will need approval from the federal Competition Bureau, which is required for transactions valued at over $96 million.

Set up at Ange-Gardien, Que. in 1961 by Fulgence Menard, the Menard business today has over 1,200 employees across all its business lines and accounts for production of over 1.1 million hogs per year on over 300 farms, or about 15 per cent of all Quebec production.

F. Menard distributes its products in Canada and in 30 other countries, most notably Japan, and launched its own bacon retail brand, Le Meilleur Bacon, in 2017.

The deal will see La Coop’s meat packing business, Olymel, take over management of F. Menard-owned hog farms, plus:

• a pork slaughter, cutting and deboning plant, which saw a $7 million expansion in 2016 and today has a weekly slaughter capacity of 25,000 hogs on one shift, at Ange-Gardien, about 60 km east of Montreal;
• a pork product plant at nearby St-Jean-sur-Richelieu;
• a 70,000-square-foot bacon plant, set up in 2011 at Henryville, about 45 km southwest of Ange-Gardien;
• two specialized butcher shops; and
• the company’s transportation fleet.

La Coop’s Sollio Agriculture arm, meanwhile, will take over F. Menard’s 500,000-tonne per year milling operations at Ange-Gardien and nearby Saint-Pie-de-Bagot and its grain storage and drying facilities at nearby Sainte-Brigide-d’Iberville.

F. Menard’s separate operations in poultry production are not part of the deal, La Coop said.

“After long strategic reflection, the decision to sell the company proved to be the best solution to ensure a promising future for F. Menard,” the company’s executive director Luc Menard said in La Coop’s release.

“We have come to the decision we are announcing to you today with the preservation and development of what we have built over the past six decades and the interest and future of our employees in mind.”

Olymel CEO Rejean Nadeau said the combined business “will take advantage of new synergies and increased capabilities to offer our customers and consumers high-quality products and excellent service,” but didn’t specify what the synergies will involve.

La Coop’s executive committee president Ghislain Gervais said Olymel “has all the resources and expertise to help F. Menard grow, take its expertise further and leverage the growth resulting from this agreement to compete even more effectively with world-class companies in all markets.”

Olymel today has over 13,000 employees at meat production and processing plants in Quebec and four other provinces, and exports nearly a third of its total sales.

Sollio Agriculture CEO Sebastien Leveille said the Menard feed operations “will continue independently” within Sollio once the deal closes.

The Menard feed business’ “expertise and employees will be invaluable in positioning Sollio Agriculture’s milling activities and strengthening our leadership role in the marketing of agricultural inputs in Canada,” he said. — Glacier FarmMedia Network

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JBS, whose holdings include one of Canada’s biggest beef packing plants at Brooks, Alta., announced Monday it has an agreement in place to buy Plumrose from Danish co-operative Danish Crown for US$230 million.

The deal would give JBS four processing plants — a deli meats facility at Booneville, Mississippi, a bacon plant at Elkhart, Indiana, a pork ribs plant at Swanton, Vermont and a bacon and deli meat plant at Council Bluffs, Iowa — and distribution centres in Indiana and Mississippi.

The share purchase deal, which already has approval from the boards of both Danish Crown and JBS, is still subject to approval from U.S. antitrust regulators, the company said.

JBS said the deal “strengthens its customer base and geographical distribution” in the U.S. — AGCanada.com Network

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