By Ron Gunson
Business Development Manager,
Grand Valley Fortifiers
Olymel’s recent announcement to cut Quebec slaughter by 1,250,000 head has been a major blow to central and eastern pork producers. Originally, Olymel had planned to achieve a 1,250,000 total reduction by cutting 750,000 from Quebec and 500,000 from Ontario. The Quebec Producer Board (Les Éleveurs de porcs) disputed this decision by Olymel and requested a hearing with the Quebec marketing regulatory body (La Regie des marchés agricoles et agroalimen- taires du Québec). La Regie ruled in December to adjust Olymel’s cuts as fol- lows – 530,000 less from Quebec and 720,000 less from Ontario. La Regie’s decision means that instead of a reduction of 10,000 per week from Ontario to Quebec, it will now be 14-15,000 per week.
Certainly, the news of the Olymel’s huge reduction in harvesting hogs is a great concern for the entire Eastern Canada swine industry. With these challenges of reduced capacity in Ontario & Quebec, there appears to be more of an appetite for hogs stateside, as well as from Maple Leaf Foods in Brandon, Manitoba. With the current war in the Ukraine, and plant la- bour issues still a challenge, some land-based producers may consider selling their corn instead of feeding it through hogs.
When making a decision like this, there are some important things to consider including, whether a producer is in pork production for the long term, and if a succession plan has been put in place. If the pro- ducer is land-based, has good health & production, this is a storm we encourage them to weather. There are options available if producers are still looking for a home for their hogs. Ontario Pork Marketing Division has secured block deals with a few US Processors in the Eastern corn-belt, as well as a large block deal to Maple Leaf Foods in Brandon. In speaking with Blair Cressman at Ontario Pork, it sounds like US pro- cessors are now shuffling market hogs from the eastern corn-belt into the Midwest (Iowa, Minnesota, South Dakota) to fill gaps in hog supply. Along with a new USDA pilot program to allow some US processors to operate at faster line speeds, this is opening opportunities for Ontario hogs to move south. There is also strong demand for weaner and feeder pigs from the US if this is an option for your operation. If a producer is looking to sell hogs either on the spot market or as part of a longer-term agreement, we recommend they contact Blair Cressman at Ontario Pork directly (226-749-4262), or through one of the local Ontario brokers (Zantingh, Werden, Global).
At the time of writing, Lean Hog Summer Futures are exceeding $114 USD per 100 lb, as you can see in the chart below. However, with the market volitility that we’re witnessing in recent days, the price two weeks prior had reached well above $120.
This article was written for the Spring 2022 Swine Grist. To read the whole Swine Grist, click the button below.