By Connor Lynch
COVID-19 has continued to put a squeeze on Canada and Ontario’s agricultural industries. Beef and hog sectors are still feeling the pain but they are now joined by grains and oilseeds.
Processing plant closures and slowdowns hit the livestock sector and a huge drop in gas demand has whacked corn prices. The Canadian Federation of Agriculture said that Canada’s farms need $2.6 billion from the federal government to weather the storm. The feds announced $252 million in agriculture funding last month. In late April, the feds announced a $9-billion aid package for post-secondary students who couldn’t find work.
Farm leaders were livid. Ontario Federation of Agriculture president Keith Currie called the federal response “insulting” and feared that as many as 15 per cent of farms could shut down by year end.
Farm leaders have asked farmers across the country, including 50,000 in Ontario, to write their MPs asking them to make Canada’s food system the biggest priority after health care. A sample letter can be found online at www.producingprosperitycanada.ca/writeyourmp.
“There is not a farmer out there in the countryside who is making any money on corn,” Grain Farmers of Ontario chair Markus Haerle said. The GFO estimated net income losses at $130-$140 per acre for corn and $40 per acre for soybeans.
“We’ve been dismissed in any consultations around how we could get some more dollars,” Hearle said. It’s especially frustrating with all the talk around food security, he said. “Food security starts at the bottom of the process, not the top.” No grains means no pigs or cows to turn into bacon and steaks.
Some older farmers in his area are considering renting out their land instead of farming it next year, or maybe even selling off a chunk. There’s enough talk of selling land going around that there’s also concern about price correction but it couldn’t come at a worse time for farmers trying to shore up cash flow.
The federal government response has been enhance the existing Risk Management Programs. Federal ag Minister Marie-Claude Bibeau said that the programs are underutilized, and farmers need to be taking full advantage of the programs that exist before she can make the case that they need improvement. Haerle thinks that the perception is too region-specific. It’s a fair comment out West; not in Ontario, he said.
The biggest sting is what’s going on south of the border. Farmers in Canada have been offered loans, albeit with generous terms. But the U.S. has given billions to farmers, no strings attached. For Haerle’s acreage, based on U.S. payouts, he figured he’d be getting about $100,000.
“We, as Ontario (farmers), have to compete against (other farmers) on the world stage,” he said. “To make a level playing field, it shouldn’t be done just through loan programs.”
Meantime, back in March and April the beef and hog sectors were the ones struggling the most as prices dropped, while processing plants closed when employees became infected with COVID-19.
Quebec’s Olymel plant and Conestoga Meats in Western Ontario process the majority of Ontario’s pork and both plants temporarily closed. Ottawa-area hog farmer Bruce Hudson was pushed to brink as he feared having to euthanize more than 200 hogs. He eventually found buyers and was able to use local abattoirs.
Processing plants re-opened and introduced new precautions. Conestoga Meats made it mandatory for employees to wear masks and face shields. The company is doing temperature screening on-site; workers are separated by plastic shields on the floor; and plexiglass table dividers are in place in lunch rooms. After closing for a week in late April, the plant installed over 150 dividers between workers and added additional break areas before reopening May 4.
Face protection, such as masks and shields, physical divisions on the kill floor and in the plant, limited carpooling and staggered shifts are all efforts many companies have had in place early on in the pandemic, Canada Meat Council President Christopher White told Farmers Forum. “Based on all the signs, there’s likely to be a second wave (of COVID-19),” and industry is busily preparing for it, he said.
As demand and beef processing slowed down, mostly in Western Canada, beef producers were losing as much as $400-$500 head on animals, said Beef Farmers of Ontario board member Jack Chaffe. Then, prices suddenly jumped up by $250-$300 per head. It certainly wasn’t enough to solve or even end a crisis but it made a big difference to some producers.
Canada still has a significant backlog of beef animals, mostly out West where two major processing plants in Alberta had to completely close temporarily. But in Ontario, Chaffe said, the backlog of beef was cleared by late May.
The pork industry meanwhile told a similar story to the beef industry. Ontario Pork chair Eric Schwindt said price lows of $1.18 per kilo for hogs back in early April went as high as $1.70/kilo by late May. It was the difference between losing $50 on a hog and making $4 on one, he said.
There were concerns that hog farmers might have to cull animals, but Schwindt said that hadn’t happened in Ontario yet as of late May. Producers held onto animals longer, sent them to atypical markets such as Manitoba, and processing plants and local abattoirs have been working overtime to clear the backlog.
Hogs and beef have both been struggling for years with different issues, namely processing capacity on the beef side, and getting caught up in trade wars and disputes on the pork side. Neither industry came into COVID-19 in a position of strength.
Supply-managed sectors tell a different story as they weather the storm. An announcement of milk dumping, as demand from restaurants and schools dropped, scored major headlines back in April, but nobody’s had to dump any milk since that one weekend in April, said a spokesperson for Dairy Farmers of Ontario.
Broilers got a 15 per cent volume cut back in April as supply chains struggled to shift, with restaurant demand gone and grocery store demand spiking but overall demand is a touch below normal, according to Chicken Farmers of Ontario.
COVID-19: Crops face losses; livestock sector catches a break, supply management weathers storm
By Connor Lynch