April 19, 2023

Canadian swine industry players agree on new pricing formula

Key players in the Canadian swine industry have agreed to the Hog Marketing Agreement, a new pricing formula to define the price of livestock sold to slaughterhouses, The Canadian Press reported.

The agreement was presented by former Minister of Finance Raymond Bachand to Canada's Agriculture Minister André Lamontagne, accompanied by David Duval, president of the Éleveurs de porcs du Québec (Quebec swine breeders association), and Yanick Gervais, president and CEO of Olymel.

The agreement comes at a critical time in Canada's pork industry's, with a closed Chinese market, supply chain disruption, and labour scarcity.

Olymel, which owns nearly 80% of Canada's pork processing industry, claims the industry has lost CND 390 million in the last two years.

In recent months, the company has closed five facilities, including the Vallée-Jonction hog abattoir, which was announced last week. Almost 1,000 workers will be laid off.

Olymel's problems are affecting swine farmers, whose income is dependent on purchases from the cooperative.

Due to a decrease in the purchase price, farmers have been forced to sell at a loss to Olymel for the past year. This loss was then compensated by the Financière agricole du Québec's (FADQ) farm income stabilisation insurance programme (ASRA).

Beginning in June, the cooperative also planned to reduce swine slaughter by 20%. In this difficult environment, the swine breeders association have implemented a voluntary buyout programme for producers who will stop producing for at least five years, with the goal of reducing the number of hogs raised in Quebec by one million.

-      The Canadian Press