'Worst scenario I've seen in decades' for Manitoba producers as demand disappears: Pork Council GM
Closure of meat-processing plants hits pocketbooks of Manitoba pork, beef producers
Manitoba hog producers are reeling from closed slaughterhouses and empty restaurants, and losing money on every animal they sell, says a spokesperson for the province's industry association.
"This is the worst scenario I've seen since probably 1998," said Andrew Dickson, general manager with the Manitoba Pork Council.
Cases of COVID-19 at American pork-processing plants, including in South Dakota and Iowa, have temporarily closed facilities and slashed the number of hogs being processed every day by an estimated 60,000, Dickson said.
The growing backlog has a rippling effect across the industry.
Although there are more pigs, the remaining slaughterhouses face stunted demand because sales from restaurants and hotels are drying up — which, in turn, lowers the price on every hog.
A finishing pig that commanded $180 in January is now worth around $130, Dickson said.
It's even worse for the weanling pigs sold to producers in the United States.
"Today, we've got producers in Manitoba getting zero for the price of those pigs going into the United States."
Selling opportunities drying up
Dickson said some hog producers may pull back on production going forward, but that doesn't help them make money today.
"They're going to be losing significant amounts of money for every hog they sell."
Steinbach-area hog farmer Rick Bergmann told a national news conference Thursday the stories from individual producers are bleak.
And so is his own. It costs Bergmann $40 to feed each of the 800 piglets he sells to the United States weekly, but those hogs are suddenly worthless to the supply chain.
"This week, we had somebody call and say, 'Well, if you give them to us for nothing, we'll take them,'" he said in an interview.
Bergmann loses $32,000 on the transaction. He cannot sustain blows like that for much longer, likening the situation to calling for help while his boat takes on water.
The Canadian Pork Council, which he chairs, is pushing for an immediate stimulus for producers of $20 per pig. He said existing federal aid programs are inadequate.
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In Manitoba, fully grown hogs are sold locally to HyLife Foods and Maple Leaf Foods, two processing companies still running, but adhering to physical-distancing protocols.
The union that represents more than 4,000 employees at the two companies is impressed by their response to COVID-19.
"There are temperature checks, masks for each employee, expanded lunchroom spaces and staggered breaks at each facility," said Jeff Traeger, president of the United Food and Commercial Workers Local 832, noting neither company has reported a case of COVID-19 in Manitoba.
"They have been very proactive. As soon as there is an idea out there about ways that they can protect their workers, our members, they've been very, very keen to implement those whenever they can."
Plexiglas dividers needed: UFCW
He said the companies are considering Plexiglas dividers, which Traeger explained are difficult to install on the processing lines. They're needed, though, because workers are no more than a foot apart on the killing floor.
In the long run, a processing backlog in North America may result in less pork on store shelves, which may spike prices, he said.
The Retail Council of Canada said existing shortages of any meats are because of changing buying patterns, not supply problems.
"Grocery stores are dealing with all of the business that used to, in part, go to restaurants and hotels," said spokesperson John Graham.
"Individual stores are sometimes challenged to have the right amount of product on the shelves at the right time."
Beef producers are also in trouble. The closure of the Cargill plant in Alberta — which processes roughly 40 per cent of Canada's beef — due to a COVID-19 outbreak has had a chilling effect on livestock producers.
"If they can't market their animals, they need to hold on to them, and that's an added cost to have to feed that animal on a daily basis," said Carson Callum, general manager with the Manitoba Beef Producers.
Manitoba Beef Producers is asking the federal government to reinstate the set-aside program, which compensates producers for feeding the cattle they hold back a maintenance diet. The program was first implemented during the BSE crisis.
The group says that would help people like Tyler Fulton, who raises cattle in Birtle, Man.
He recently sold heifers for 20 per cent less than the price he would have got a month earlier.
"That has direct impact on the cash flow," he said.
"It's going to impact the decisions we make on the farm."
With files from Laissa Pamou