With meat-packing plants shut down temporarily and restaurant demand dead, livestock producers saw April as the month from hell

By Connor Lynch and Patrick Meagher
LANARK – By the end of April, Ottawa-area hog farmer Bruce Hudson, had more than 150 hogs on his hands and nowhere to send them. With strong local demand, he was able to push some through local abattoirs. Then the Olymel plant east of Montreal re-opened at half capacity and he unloaded some more. But 80 hogs were oversized, meaning more feeding costs and the certainty that he would have to sell them at a discount.

“It will take awhile for this backlog to get caught up, if it ever does,” Hudson said, adding that with each shut down “it’ll back up pigs pretty quickly.”

Aside from very few small and local abattoirs, Ontario producers use two large pork processing plants. The other one at Conestoga plant also temporarily shut down, reigniting rural anger at heavy-handed government regulations that decimated rural abattoirs over the past decade.

April proved to be the month from hell as about 20 large slaughterhouses across North America faced work interruptions and closures as hundreds of workers tested positive for COVID-19. Meantime, many of Ontario’s beef and pork farmers were pushed to the breaking point. They began talking about euthanizing animals. Millions of beef, chickens and hogs were expected to be euthanized in the United States until President Trump announced that meat-packing plants were critical infrastructure and needed to stay open to ensure food supply.

The outbreak of COVID-19 was just the latest in a series of blows over the last two years.

The beef sector has reeled from crisis to crisis. The shutdown last fall of Ryding-Regency Meat Packers, due to health violations, put a squeeze on processing capacity that was already tight. That left four large plants that Ontario beef farmers accessed until Cargill temporarily shuttered 40 per cent of Canada’s beef processing capacity in Alberta. A COVID-19 outbreak killed an employee in her 60s and infected hundreds more. The JBS Beef Plant in Pennsylvania shut down for a week after employees there contracted COVID-19. The other two plants are St. Helen’s in Toronto, and Cargill at Guelph.

Ontario beef farmers were already facing losses of $2 million per week before COVID-19, and losses for feedlots have as much as doubled since.
Feedlots feel the pain first but it will affect the whole sector, Beef Farmers of Ontario president Ron Lipsett said. “After all the crises we’ve faced, you can’t help but wonder: Is this the final straw?”

Prices fluctuated dramatically through April but overall stayed firm. But “the way the market has been up and down, (we’re) only one announcement away from a drastic situation.”

Beef farms have plenty of equity but they’ve been spending it for two years already, he said. “Most have already reached their limit on equity and collateral. They’ve borrowed as much as they can.”

He added that this crisis could equal or be worse than the 2003 BSE crisis that slammed shut borders to Canadian cows.

Some beef farmers were also hit by the restaurant shutdown. It has been particularly rough for Dan O’Brien, who raises about 150 Simmental beef animals at Winchester. Ninety per cent of his market were restaurants in and around urban Ottawa and Kemptville. But families want steaks, he said, and restaurants took the ground beef and stewing beef. “We’re very limited because we’re not selling all this ground beef” he said.

Some Ontario hog farmers feared closing down. The Quebec Olymel Pork plant was back to taking 20,000 hogs per week from Ontario by the end of April but had been down to 8,000/week when it was closed.

Ontario Pork chair Eric Schwindt said that producers could survive if the plant stays open. But then Western Ontario’s Conestoga Meat Packers, one of Ontario’s big three processing plants, closed for a week in late April after seven employees contracted COVID-19.

The Canadian Pork Council (CPC) has warned that as of April 23, supply chain disruptions and plummeting pork prices have cost producers an estimated $20 to $50 per hog, for a total of $675 million across the country. The pork council called for an emergency payment to producers of $20 per hog. “Without it, family farms will be lost,” chair Rick Bergmann said.

Western Ontario hog producer Mark Huston said on April 27 that hog prices were down as much as 40 per cent from mid-March. “This is a time of year when normally we’d expect prices to rally,” he said.

The Grain Farmers of Ontario, Veal Farmers of Ontario, Beef Farmers of Ontario and Ontario Sheep Farmers signed a joint letter on April 27 calling for the province to remove caps on the Ontario Risk Management Program (RMP). Beef farmers also called for a return of a set-aside program for beef animals, last used during the Bovine Spongiform Encephalopathy (BSE) outbreak.

The sheep sector had mostly weathered the crisis by late April, but producers were under no illusions, said Ontario Sheep Farmers general manager Jennifer MacTavish.

Increased funding for RMP has been a long-standing ask and that’s taken on an acute tone in the midst of COVID-19. Said MacTavish: “Regardless of what you’re farming, knowing you have access to an insurance program that helps you manage your risk gives you confidence. That’s something our industry needs, especially in a moment like this.”

Chicken farmers were also feeling the pinch. The chicken marketing board cut producer quota by 15 per cent after the restaurant demand evaporated. The strain was exacerbated when the Maple Leaf plant at Brampton closed temporarily due to worker infections. At full capacity, the plant processes 90,000 birds.

Casselman broiler farmer Monique Thibert told Farmers Forum that she was grateful that her operation is established as this cost would be much harder for a younger farmer to swallow.

“Someone new, with a lot of debt? They’d have to go see their bank,” she said. Thibert donated about some chicken from her last flock to a food bank. But she had anxieties about where her next flock would go. Processing plants were running with fewer employees, so she wondered if her plant in Quebec can’t take her next flock, there’s no room anywhere else for it to go, she said. “We’re crossing our fingers.”