Canada’s pork producers are asking for emergency federal aid as their market spirals downward.
Market disruptions due to COVID-19 have landed the pork market in a bad place as of late April. Multiple plant closures in the U.S. have dried up markets for Canadian weanlings, a two-week plant closure of an Olymel facility in Quebec stranded tens of thousands of market-ready hogs, and producers are now wrestling with dwindling barn space as supply chains back up and prices that have suddenly plummeted.
Why it matters: The pork sector argues that operations are creeping closer to the financial edge each day and that, in turn, might threaten pork supplies if the government does not step in.
On April 23, Hams Marketing noted that, “at least 10 primary and secondary U.S. pork-packing plants were closed or partially closed due to COVID-19 outbreaks on the production line.”
Those closures represented about 15 per cent of U.S. pork capacity, it noted.
Plants that haven’t closed have still seen a slowdown in production lines, industry groups have warned.
Andrew Dickson, Manitoba Pork general manager, has previously noted that social distancing has added challenge to production lines and slowed capacity.
The same April 23 Hams Marketing report said that U.S. slaughter volumes as of April 21 were down 25.5 per cent compared to the year before, a major shift from the trend earlier in the year, when packers were operating well above last year’s volumes.
The Canadian Pork Council expects producer losses to hit about $30 a head, rising to $50 a head in some regions, or about $675 million in loss due to the market slowdown.
“There has to be a political will to help us who create food for the country to consume,” council chair Rick Bergmann said. “Without action, family farms will be threatened. They are threatened already. The risk of our food supply disruption increases, and so does food insecurity if supplies tighten and food gets more expensive.”
In the second week of April, Dickson reported that some producers selling isoweans on the cash market were taking no price on their animals, and were in some cases paying transport for those valueless animals, in a desperate bid to clear barn space.
The April 23 marketing report from Hams Marketing put average isowean price at $5.60.
Bergmann, meanwhile, noted that some isowean operations in Western Canada were no longer able to find any buyers for their open-market animals.
“That is a drastic concern,” he said.
Cry for help
On April 23, the Canadian Pork Council said it was asking the federal government to pay producers the equivalent of $20 per head to ease the financial crunch.
Bergmann says the aid is needed to help producers cover feed and fuel costs in the immediate future and to help secure the future supply of pork.
“COVID-19 has quickly pushed farmers into a negative cash flow position. Their market returns don’t even cover the costs of operating the business,” Bergmann said.
“Our figurative farmhouse is burning down,” he later added. “Now is not the time to think about windows or what colour of paint we’re going to paint the house and how we can improve it. It’s burning down right now, so we really need a response on finding the solution… we need the fire crew to show up and put a lot of water on.”
The sector has warned that the need for aid is critical.
The council’s vice-president, René Roy, warned that the window for aid should be counted in days, rather than months.
Manitoba Agriculture and Resource Development is also monitoring the situation and is in “constant contact,” with the pork sector, a representative from the department said, although no programs specific to the pork industry have been announced.
Agriculture and Agri-Food Canada did not respond to requests for comment as of press time.