Quebec pork processor Olymel is taking about half of the pigs it usually does from Ontario and is working to get out of contracts with producers, due to processing shortages related to COVID-19.
Olymel informed Ontario producers on April 2 that it would be invoking Force Majeure – the clause in contracts that covers unforeseen events beyond the control of the parties of the contract.
Why it matters: Quebec is a market for about 20,000 Ontario hogs per week, and any disruption of that demand will have an effect on Ontario hog farmers.
Hog production is carefully timed, so any loss of marketing creates immediate animal flow challenges for farmers.
Olymel has processing plant shortages in Quebec, as it had to close its Yamachiche plant for 14 days after nine employees were diagnosed with COVID-19.
It has also had challenges at its St. Esprit plant due to labour shortages related to COVID-19.
No Ontario hogs were processed at Yamachiche, says Stacey Ash, Ontario Pork’s communications manager, but the issues at both plants caused Olymel to cancel some Ontario loads. It is currently taking less than half of its usual volume.
Olymel is legally required to process Quebec hogs first, but it is challenging that convention in court on Monday, April 6, with support from Ontario Pork.
Ash says that while Olymel is trying to reduce its volume of Ontario hogs, it is also committed to purchasing some Ontario hogs.
“Ontario Pork is working with Olymel and other processors across Canada and the U.S. to seek alternatives, but in a worldwide crisis, options are very limited,” she says.
Both federally inspected packing plants in Ontario are running at capacity, she says, but they are running overtime and weekend shifts to help with the backlog. Western Canadian and U.S. plants are at capacity.
American hog farmers were sending large numbers of pigs to market before the COVID-19 crisis and have increased that number in the past couple of weeks.