Olymel has announced plans to close six hog production facilities in Western Canada.
The company is closing five sow units in Alberta (Smoky Sow/Dev, Pinnacle 1, Pinnacle 2, Dynacrest 1, and Dynacrest 2) and one in Saskatchewan (Kelsey) cutting about 17,000 sows from their operations.
Olymel's Vice President of Swine Production in Western Canada Casey Smit says ongoing challenges in the pork industry, financial losses, and uncertainty in the hog and pork markets led to the decision.
"There are many factors involved one of the major ones, of course, is just the cost of production. Feed makes up 65 per cent of that cost and with the drought that occurred two years ago that drove prices up. We didn't see any relief last year and that's really just continued into this year. So that is one major factor that just continues to weigh on the industry as a whole."
Smit says the cost of production is a key concern for everyone in the sector with a loss of $50 on a per market hog basis.
He says another key factor is the oversupply of pork we're seeing globally.
"There's just a tremendous amount of pork sitting in cold storage which continues to grow which just depress prices. So right now you just don't see any months with a positive margin in it until at least next summer."
The closure of the six sow operations in Western Canada will bring Olymel’s western sow herd from 57,000 to 40,000 sows in production and will result in a net reduction of about 200,000 company-owned market hogs annually to their Red Deer slaughter plant.
Over the next few months, they will begin winding down operations at the barns.
Smit says the barns will remain shuttered until market conditions improve, they just don't know how long that will be.
Approximately 80 staff have been given their layoff notices, Olymel is working with those affected to find other positions within the company or placement outside the company.
To hear Glenda-Lee's conversation with Olymel's Vice President of Swine Production for Western Canada Casey Smit click on the link below.