Pork industry Eastern Canada faces difficulties

Quebec leads the country in most pigs slaughtered per year. Recently, the Premier of Quebec stated that pork farmers are in an “extremely difficult situation,” with over 700 of them dealing with serious financial challenges. Opposition party politicians noted that younger producers are considering whether or not they have a future.

Labour, feed, and interest issues

After the pandemic challenges ended, now ongoing labour issues, increased feed costs and higher interest rates are plaguing the industry. Lower demand for pork is also a serious issue, due to factors like an aging population that eats less meat and the current rising cost of meat. All this resulted in a major Canadian packing firm, Olymel, shutting down a large plant on June 3. Stephen Heckbert, executive director of the Canadian Pork Council (CPC), recently said that current conditions have “a particularly onerous impact on our processors.”

Canada’s main farm lender and agriculture economic analysis group, Farm Credit Canada (FCC), offers support to swine customers in Ontario, Quebec and the Atlantic provinces facing financial hardship as a result of the current crisis. Manon Duguay, FCC vice-president of operations for Quebec and Atlantic, said “we stand ready to assist them with any short-term financial challenges they may face as a result of this accumulation of unfavourable production conditions.”

Chinese market

Most Canadian pork is exported, and CPC is taking action to increase exports, particularly to China. The agency has hired a director to build market access there. Chinese market access had been restricted for Canadian pork due to tensions over the last 2 years between the 2 countries. Things were looking better recently, but 3 weeks ago, China expelled Canada’s consul in Shanghai in retaliation for Canada ordering a Chinese diplomat (accused of intimidating a Canadian Member of Parliament) to go home.

New agreement

Recently, Quebec’s pork producers, represented by the Éleveurs de porcs du Québec, renewed their Swine Marketing Agreement with buyers, following over 15 months of negotiation. It charts a path forward for reduced pig production in the province.

The buyers and breeders agreed to various mechanisms to ensure the sale of Quebec pork while waiting for production to decrease. Among these, Olymel agreed to keep its plant to be closed open until June 3, and to stop buying hogs from Ontario.

The agreement also includes a new pricing formula that shares the risks and benefits associated with the marketing of pork, and ensures a more predictable price for pork.