La Broquerie, Man.-based HyLife announced last week it has bought a 75 per cent stake in Taylor Corp.’s Prime Pork, a packing and processing operation at Windom, Minnesota, about 200 km southwest of Minneapolis.

Taylor Corp. set up Prime Pork in 2016 at Windom’s former PM Beef packing plant, which had closed the previous year. The renovated plant now employs about 660 people and has capacity to process about 1.2 million hogs per year on a single shift, HyLife said.

The deal “will allow us to expand our operations into the United States” and will increase HyLife’s total processing capacity to 3.2 million hogs per year, HyLife CEO Grant Lazaruk said in a release May 22. The deal’s dollar figures weren’t released.

“Plants in both Canada and the U.S. will strengthen our supply chain, giving us further diversity in our operations to better serve our customers around the world,” Lazaruk said.

Specifically, combining the two operations for product flow from both the U.S. and Canada will allow for “additional marketing opportunity to customers who only carry pork products from either the U.S. or Canada,” Prime Pork said in a separate release.

Taylor’s Prime Pork and Comfrey Farm businesses also include hog farming operations, in which the company owns the pig inventory and contracts with third parties for barn facilities, feed and management.

Those contract operators today raise about 300,000 feeder hogs per year to market weight and Prime Pork sources other hogs from third party suppliers.

Privately held Taylor Corp. owns various agribusinesses as well as Minneapolis’ StarTribune newspaper and Minnesota’s NBA and WNBA basketball teams. “With this new partner and leadership, I am confident this agreement will be great for the community, employees and area producers,” Glen Taylor said in Prime Pork’s release.

“Prime Pork’s location in southern Minnesota provides an abundance of resources, securing hog supply and the other raw materials required to operate a processing facility efficiently.”

Manitoba hogs

HyLife also announced May 5 it had bought the hog farming operations of ProVista from its Manitoba owners, Harold and Arthur Rempel, for an undisclosed sum.

Steinbach, Man.-based ProVista is today billed as “one of Canada’s largest independent hog farming operations,” with hog production sites in Manitoba’s southeast and Red River Valley regions and in the RM of WestLake northwest of Portage la Prairie, as well as in southeastern Saskatchewan.

The assets going to HyLife in that deal include a boar stud operation and 37,000 sows in 12 sow barns, along with six nursery and six finishing barns producing up to a million hogs per year, employing 252 people.

The ProVista farms are “in close proximity to HyLife’s current operations,” HyLife said, allowing for “strategic synergies, as the newly acquired farms will be added to HyLife’s existing infrastructure.”

“We have a long working relationship with ProVista and look forward to building on all the hard work that they have done,” HyLife’s Lazaruk said May 5. “This acquisition enables HyLife to expand our production team and secure hog supply to facilitate future growth.”

“We are confident this sale represents an opportunity for our employees to grow with a global leader in the pork industry, and it fulfills our farming business aspirations,” the Rempels said in the same release.

The Rempels’ other businesses include Proline Pork Marketing, Horizon Livestock and Poultry Supply, ProVista Feeds, PVS Transport and Quarry Oaks Golf Course.

HyLife has been in aggressive expansion mode in recent years, expanding its hog processing plants at Neepawa, Man. and at Salvatierra in central Mexico, building and buying additional finishing barns and putting up a new feed mill at Killarney, Man. — Glacier FarmMedia Network

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Paul Vielfaure died suddenly Nov. 23 at age 59, his family reported in a brief obituary in Winnipeg and Steinbach newspapers this week.

Radio-Canada reported Tuesday that Vielfaure had died in Phoenix, Arizona. While Vielfaure was known to have lived with multiple sclerosis for over 20 years, the French-language public broadcaster said his death was “not attributable” to MS.

Vielfaure, his brothers Denis and Claude and partner Don Janzen launched the hog production company then known as VL4/Janzen, based at La Broquerie, Man., east of Steinbach, in 1994.

Paul Vielfaure retired nine years later from the company, and from his position as a delegate to the Manitoba Pork Council.

By 2008 VL4 had changed its name to Hytek, taken on new partners Grant Lazaruk and Henry Van de Velde and purchased the Springhill Farms pork processing plant at Neepawa, Man., about 75 km northeast of Brandon.

The hog company, which rebranded as HyLife in 2011 and remains headquartered at La Broquerie, today produces over 1.4 million hogs per year and has expanded its hog production business into the U.S. and China.

HyLife’s Neepawa packing plant doubled its processing capacity and now handles about 6,500 hogs per day, supplying pork to domestic and export markets. — AGCanada.com Network

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Canada’s pork sales to China, after a sharp rise last year, exceeded those of the U.S. in the first quarter of 2017. That’s only happened a handful of times in two decades, according to U.S. and Canadian government data.

Rising affluence is driving China’s voracious appetite for pork, including parts of the pig — feet, elbows, innards — which command little value in most countries. At the same time, tightened environmental standards in China have forced farm closures and boosted demand for cheaper imports.

That’s a bonanza for Canadian farmers, who have almost completely removed the growth drug ractopamine from their pigs’ diet — largely because it is banned in China, which consumes half the world’s pork.

U.S. exports to China, by contrast, are limited because only about half of the nation’s herd has been weaned off the drug, according to U.S. hog producers, meat packers and animal feed dealers.

But major U.S.-based firms are now moving to produce more ractopamine-free hogs — including the three biggest pork producers: Smithfield Foods; Seaboard Foods, a division of Seaboard Corp.; and Triumph Foods, a hog farmer co-operative.

The ascension of Canada’s pork exports underscores the power of the gargantuan Chinese market to influence agricultural practices and profits in supplier countries worldwide.

As recently as 2013, annual U.S. pork sales to China, some 333,000 tonnes, more than doubled Canada’s shipments of 161,000 tonnes.

That’s the same year Canada’s hog industry started to remove ractopamine, best known as Eli Lilly product Paylean.

In the first quarter of this year, Canada shipped nearly 93,000 tonnes of pork to China, on pace to hit 372,000 tonnes annually. That eclipsed the 87,500 tonnes that the U.S. shipped, according to data from both governments.

The European Union, which has long banned ractopamine, is China’s top foreign pork supplier, sending 393,365 tonnes there in the first quarter.

Chinese authorities banned the use of ractopamine in livestock in 2002. They say meat raised with the drug can cause nausea and diarrhea in people and be life-threatening to sufferers of heart disease.

The U.S. Food and Drug Administration, however, did not see the same dangers when it approved ractopamine in 1999, concluding that it would “not have a significant impact on the human environment.”

The FDA’s stance has drawn some criticism, including a 2014 lawsuit by environmental groups alleging the agency has not fully examined the drug’s impact. The suit was later dismissed on technical grounds but is being appealed.

Hog farmer and rancher groups defend ractopamine use, saying it allows them to grow livestock more efficiently, with less feed, said Dave Warner, spokesman for the National Pork Producers Council. Canadian health authorities also allow consumption of pork from hogs raised with the drug.

Selling elbows online

The China market is so lucrative that Canada’s HyLife started selling pork online directly to Chinese consumers last year.

The small Manitoba processor hawks pig feet and elbows on e-commerce site JD.com Inc., a competitor of Alibaba Group Holding Ltd.

“They’re big online buyers,” said Claude Vielfaure, HyLife’s chief operating officer. “You try to move your pork all kinds of ways.”

Rising Chinese pork demand has driven up prices for byproducts including pigs’ feet, kidneys and livers.

Pigs feet sell for more than $2.50 per kilogram — about double their value two years ago, said Richard Davies, executive vice-president of sales and marketing at Olymel, one of Canada’s biggest pork packers.

Selling by-products can squeeze another $10 per pig from a carcass that otherwise earns packers about $180, said Ray Price, president of Alberta-based processor Sunterra Meats.

China is the biggest byproduct market, followed by Taiwan and Philippines.

Stewed pigs feet with white beans is a famous dish from Sichuan province, one of China’s culinary capitals, while blood sausage, made from intestines and cooked with pickled vegetables, is a traditional winter dish in the northeast.

Chinese consumers enjoy the strong flavor of offal — internal organs and entrails. In Beijing, stir-fried pig’s liver with vegetables is common on dinner tables and known for its nutritional value.

In all, China consumed 55 million tonnes of pork last year. Although that is the lowest total in four years, imports are rising fast because millions of China’s small-scale farmers have left the pork business in recent years because of falling prices and rising environmental standards.

The government forced thousands of farms to close because of severe water pollution.

China became Quebec-based Olymel’s biggest export market last year, vaulting over the U.S. and Japan. It plans to open a sales office there as early as next year.

“Just a tweak in that market can change the game for anyone in the world,” Davies said.

Getting pigs off drugs

U.S. pork producers have moved more slowly than their Canadian competitors to raise ractopamine-free pigs, primarily because the U.S. is the world’s third-biggest domestic market for pork.

Tyson Foods and Hormel Foods continue to process hogs that were fed ractopamine in part because they do not raise their own pigs.

Hormel’s hog supply “comes from more than 500 family farms,” a Hormel spokesman said, many of which use the growth drug.

U.S. firms can also send pork from ractopamine-fed hogs to Mexico and Japan, the top U.S. pork export markets.

But many U.S.-based suppliers are nonetheless scrambling to take advantage of Chinese demand for ractopamine-free pork.

Smithfield — the world’s biggest pork producer and a subsidiary of Hong Kong-listed WH Group — has raised most of its hogs without the drug for more than two years, a spokeswoman said. As the top exporter of pork to China, Smithfield firm shipped 300,000 tonnes there from the U.S. and Europe last year.

The second- and third-biggest U.S. pork producers — Seaboard and Triumph — are jointly opening a pork processing plant next month in Sioux City, Iowa, where nearly all hogs slaughtered will be ractopamine-free, according to local hog producers and animal feed mills.

Building dedicated ractopamine-free pork plants allows processors to limit risk of China rejecting shipments that contain trace amounts of the drug.

Seaboard declined to comment about ractopamine. Triumph did not respond to requests for comment.

The Cooperative Farmers Elevator in Ocheydan, Iowa, is constructing a new feed mill that by 2018 will produce only ractopamine-free animal feed.

“It was requested from some of the customers we deal with,” said Steve Peterson, the co-operative’s vice-president of feed. “The one that is pushing the hardest is Seaboard.”

U.S. hog producer Prestage Farms also is planning a new Iowa slaughterhouse for as many as 10,000 ractopamine-free hogs annually by 2018, president Ron Prestage told Reuters.

With the U.S. hogs in record supply, foreign demand is essential to profits, Prestage said.

“When we have plentiful hogs, as we do today, packers prefer not to have ractopamine,” Prestage said. “They want to be able to export as much product as they can.”

— Reporting for Reuters by Rod Nickel in Winnipeg, Michael Hirtzer in Chicago and Dominique Patton in Beijing.

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The number of cases since the beginning of May, now at 10, matches the total from the past three years combined, although the outbreak is not comparable in scale to PEDv’s spread across U.S. farms in 2013.

The Manitoba government confirmed on Thursday the 10th case, within the same five-km zone as the two most recent cases but outside the same buffer zone as the previous seven.

“It’s not huge at the moment, but we are really worried about this getting to 10 this quickly,” said Andrew Dickson, general manager of Manitoba Pork, an organization of pig farmers.

Hog supplies to Manitoba processing plants run by Maple Leaf Foods and HyLife remain adequate, Dickson said.

Manitoba ships large volumes of young pigs, called feeders, to the U.S. Canada has exported 1.8 million feeder pigs to the U.S. in 2017 as of May 20, up two per cent from a year earlier, according to U.S. Department of Agriculture data.

Canada is the world’s biggest swine exporter, mostly to the U.S.

A U.S. outbreak four years ago ultimately killed eight million pigs, and pushed retail pork prices to record highs. PEDv causes severe dehydration and diarrhea in pigs, and is generally fatal to young animals.

All of the infected Manitoba farms are in the province’s southeast, but it is unclear how the virus is spreading since it has been detected at farms without any obvious connections to each other, Dickson said.

The farms include mostly sow herds, which produce piglets, and finishing barns that raise pigs to slaughter weight.

One of Maple Leaf’s barns is among the confirmed Manitoba cases, spokesman Scott Bonikowsky said.

The next step will be regular sampling of 40 to 50 hog farms in southeast Manitoba, even those that do not have the virus, Dickson said.

The virus spreads best in cold, damp weather, but Manitoba’s weather has recently turned hot.

Next door in Ontario, the province has confirmed three PED cases this year, down from 14 in all of 2016, government spokeswoman Kristy Denette said. The most recent case was confirmed May 25 in the Chatham-Kent area.

— Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg.

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The company on Friday said “steady growth in demand” for its pork products overseas calls for an investment of up to $125 million in its integrated pork operations, to start “as early as 2017.”

The expansions and upgrades involved are to include a further expansion of its pork processing plant at Neepawa, Man., about 75 km northeast of Brandon, setting up a full double shift at that facility.

HyLife said it pictures those expansions as including “innovative technologies to improve yields and processes and increase shelf life.”

Speaking Monday on the pork industry program Farmscape, Hylife president Claude Vielfaure said the plan calls for expansion of 130,000 square feet at Neepawa, to include a “much bigger cut floor than we have today” and added space for packaging and shipping.

Apart from the pork plant, Hylife said it would also invest in new finishing barns and a feed mill. The company last year announced plans to build a feel mill in the southeastern Manitoba RM of Hanover.

In all, the company said Friday, the expansions would create “up to 165” jobs in communities where it operates.

The expansions, Vielfaure said, will allow Manitoba pig production that’s now sold to the U.S. to be finished and processed in the province instead.

“HyLife’s investment into growing our Japanese and Chinese markets has been very rewarding and is sending the signal that we can do more,” he said in a release.

“This new investment in Manitoba will mean not only more jobs across the province but a greater demand for value-added pork thanks to our integrated system and our great primary producer partners.”

HyLife said Friday it has become Canada’s No. 1 exporter of fresh chilled pork to Japan, booking about $200 million in annual sales from that market. The company recently opened a Tokyo restaurant to showcase its pork products.

The company said it has also been a “steady presence” in the Chinese market, making about $80 million in sales per year since it first sold into China in 2008. Last month, the company said, it signed a contract with Chinese e-commerce platform JD.com.

“HyLife has taken that unique Japanese consumer demand for its domestic pork and worked tirelessly to recreate this taste profile at home in our integrated production and processing system,” Vielfaure said.

La Broquerie, Man.-based HyLife, which set up in 1994 in southeastern Manitoba as a hog production firm under the name VL4/Janzen, took over the Springhill Farms pork packing plant at Neepawa in 2008 and rebranded from Hytek to HyLife in 2011.

The federally inspected packing plant is also approved to ship to the U.S., Russia, Mexico, Australia, Brazil, South Africa, Peru, Vietnam and Ukraine.

The Neepawa plant in 2011 received $10 million in financing under the previous federal Conservative government’s Slaughter Improvement Program, Neepawa area MP Robert Sopuck noted in a separate release Monday.

“The investment enhanced Hylife Foods’ production capacity so they could be better positioned to take advantage of growth opportunities,” he said. “This new investment shows that the program was successful.” — AGCanada.com Network

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