Another bad news is falling on the pork industry in Quebec. Only 24 hours after announcing the closure of two processing plants, Olymel warned that it would reduce its slaughterings by 20% starting in June. This decision is justified in particular by a loss of $390 million and by the “attitude” of the Éleveurs de porcs du Québec.
Olymel, which slaughters 80% of the pigs in Quebec, told breeders on Thursday of a significant reduction in its purchases of animals starting June 3. On an annual basis, 1,055,000 fewer pigs will be slaughtered, or 855,000 fattened in Quebec and 200,000 in Ontario, specifies a newsletter that I was able to consult.
“Panic is in Quebec,” commented a member of the industry who refuses to be identified so as not to harm his business.
To put things in perspective, a million pigs is what a big slaughterhouse like the one in Yamachiche, Mauritius, processed in an entire year with its 1,000 employees, in 2019.
In two years, the number of pigs slaughtered by Olymel in Quebec will therefore drop from 6.8 million to 4.2 million, a decrease of 38%. Will this significant reduction in volume result in a slaughterhouse closure? Spokesperson Richard Vigneault replied that he did not want to “speculate on it”. Senior management was not available for comment.
The problem for hog breeders is that outlets for their animals, whether in Quebec, elsewhere in the country or in the United States, are very rare. And, of course, the cycle of life does not suddenly stop. The sows continue to give birth, and the animals gain weight every day, regardless of the profitability of the slaughterhouses. Reducing animal production takes time.
The subsidiary of the Sollio agricultural cooperative justifies its decision by a series of factors, including the financial losses of 390 million recorded by its fresh pork sector over the past two years. But also by the “without notice and unilaterally” decision of the Éleveurs de porcs du Québec to end the $25 per 100 kg discount granted to slaughterhouses since mid-October.
This announcement was made on January 31 “in the middle of the conciliation process,” laments Olymel, which claims to lose $20 per pig slaughtered despite the discount.
Given its “recent profitability issues”, Olymel says it has been prevented from investing “enough in certain plants”, which has led to “technological delays” undermining its competitiveness on world markets.
Attitude involved
Even more surprisingly, Olymel writes that “the attitude of the Éleveurs de porcs du Québec within the framework of the conciliation” is one of the elements taken into account to further reduce its slaughterings. An argument that illustrates how strained relations are in the industry.
Since August, former Liberal minister Raymond Bachand has been leading a conciliation process between breeders and slaughterhouses to agree on the next price formula.
The crisis began in April when farmers were forced to accept a $40 per 100 kg pork price cut to help slaughterhouses.
As usual in recent months, the lobby, which represents 2,600 breeders, refused my request for an interview. In a newsletter sent Thursday to its members, President David Duval said he was “surprised that the end of the discount was a surprise for Olymel”, because it had been “clear”, according to him, that the most recent extension of the discount was the last […] in its present form.
The news quickly reached the office of the Minister of Agriculture, André Lamontagne. While acknowledging that Olymel’s decision “represents a major challenge for Quebec pork producers who will have to adjust their level of production,” the elected official hopes that the negotiations will succeed. “I really invite the Éleveurs de porcs du Québec and the slaughterhouses to speed up their discussions with the conciliator to resolve the situation. »
On Wednesday, we learned that Olymel would close its pork further processing plants located in Blainville and Laval in April. Their 170 workers produce Tour Eiffel, Nostrano and Alpina charcuterie and hams. These productions will be transferred to other factories in the group. The imminent closure of the Saint-Hyacinthe plant was announced in November as part of a restructuring that began in 2021.
Even more worrying for the province’s economy, Olymel mentions in its newsletter that the slaughter of pigs presents “little or no prospect of profitability”. This should be enough to convince us that the debate on the future of this industry – which employs 31,000 people and generates revenues of 3.4 billion – must take place in the near future.