Quebec hog producers may have to plan for lower production next year due to lower slaughter capacity in the province. All this while Olymel does not rule out reducing it again as part of the reorganization of its activities.
The imbalance is evident in the province’s hog industry: production exceeds slaughter capacity. A situation that could continue since the processor Olymel received last February—after a showdown with the Éleveurs de porcs du Québec—the green light from the Quebec authorities to reduce 1.25 million animals (including 530,000 from du Québec) its annual slaughter capacity.
In interview at HomeworkOlymel’s first vice-president, Paul Beauchamp, defends this decision by referring to the suspension of the right to export to China from several of its sites, the labor shortage and the four-month strike at the slaughterhouse in Vallée-Jonction, all of which weigh on the profitability of the processor, owned by the Sollio Group.
A different context
In two years, the context has changed considerably, he says: “Before, we could export products with bones to China, so products with little added value that require little labor to put it in boxes. This is no longer the case. You eat your shirt from the moment you are not able to create value on your product. »
Result: Olymel reorganized its activities. The Princeville slaughterhouse, for example, will become a processing plant as of March 24. “There could be other felling capabilities affected,” he concedes. There are elements that have been announced and others that will be; we have to find our level of balance. “All the scenarios” are on the table “, including new reductions, underlines Mr. Beauchamp.
Before, we could export products with bones to China, so products with little added value that required little labor to put it in boxes.
This is no longer the case.
However, this decline in slaughter capacity affects pork production. To be slaughtered, animals from some forty sites will have to leave Quebec shortly and head for Ontario, Manitoba and the United States.
A desired collective plan
“The main issue right now is to establish long-term agreements [même hors Québec] to ensure that local producers are not once again stuck with pigs waiting for this summer,” said David Duval, president of the Éleveurs de porcs du Québec (EPQ).
An imbalance that cannot last indefinitely, notes Mr. Duval: “We cannot manage it like that. We are not a convenience store. »
The main issue right now is to establish long-term agreements [même hors Québec] to ensure that producers here are not once again stuck with hogs waiting for this summer.
He recalls that the production of pigs, from maternity to slaughter, is spread over almost 10 months. Does EPQ envisage a decrease in pig production, which would go through a reduction in the number of sows? “We are giving ourselves a year to assess the situation,” he said.
If a decline plan is to be developed – which would be a first in the province – it will have to be collective, according to Mr. Duval. The objective: to prevent a limited number of breeders from paying the price. The latter would also like to integrate it into the new agreement that processors and breeders are renegotiating this year.
“We have never had a planned downsizing, we have never been careful to include in our agreement the regulatory aspect that would take into consideration clean production in Quebec. There, the decrease, it is done in a way with which we are not in agreement”, indicates David Duval.
There, the independent producers are the first to be affected, harmed. What we want is for the Régie des marchés Agricoles et Alimentaires du Québec to take this into consideration.
This agreement indicates that in the event of a drop in slaughter capacity, it is the local pigs — produced by independent breeders — that must be withdrawn. Then come those that have contracts with the processors and, lastly, the sites that belong to the processors, such as Olymel.
“There, the independent producers are the first to be affected, injured. What we want is for the Régie des marchés Agricoles et Alimentaires du Québec to take this into consideration. We are ready to manage a decrease if it is done collectively. And when there is growth again, we will do it collectively,” he says.
A transformed global market
Olymel sees everything differently. Paul Beauchamp maintains that, in recent years, the company has made its “ job as a corporate citizen” by “trying to disturb as little as possible” Quebec pork production, despite market transformations on a global scale.
Would Olymel be prepared to participate in a planned reduction in production by revisiting the agreements it has with producers, or even to lower the production of the breeding sites it owns? “We have assumed a lot of costs over the past two years, but we don’t want to do it anymore. We go and we can collaborate, but in terms of the bill we pay, we believe that it has stopped. »