(The Canadian Press)

By Derek Craddock

KELSEY PLANT

Olymel plant in Humboldt among several in western Canada to close

May 29, 2023 | 11:22 AM

A sow unit in Humboldt is one of many in western Canada that will soon close, leaving dozens of workers without a job.

Last week, pork producer Olymel Canada announced the closure of several sow units in Alberta and one in Saskatchewan, the Kelsey plant in Humboldt.

While the closures are only temporary, the General Manager of Sask Pork said it will still have an impact on hog production for the province.

“There’s definitely going to be fewer hogs in Western Canada as a result of this,” said Mark Ferguson. “Olymel was estimating about 200,000 less. We produce over 2,000,000 hogs; those are going to be coming out of Alberta.”

Ferguson said the closures as the result of tight margins in the hog industry and two years of extremely high feed costs. He added that the 2021 drought was the start of the issue of tight supplies of feed ingredients and high costs.

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“When hog prices are strong, we can withstand costs like that,” Ferguson said. “However, over the past few months, lean hog futures have basically deteriorated, dropping by about 30 per cent since March.”

Meanwhile, vice president of Western Canada for Olymel Casey Smit said the situation with hog production was dire.

“We’ve come off of some pretty significant losses in the last year and a half with the high fee grain costs that have been out there,” he said. “You don’t reduce the losses on the per animal basis, but you just reduce the magnitude of the losses and so that’s essentially it.”

In a news release, Olymel said the impact won’t be felt until 2024 at the earliest and will be subject to independent hog supply availability.

“Over the past two years it is well documented that Olymel has experienced significant losses in the processing of fresh pork as a result of limited market access globally,” Olymel CEO Yanick Gervais said.

“The Humboldt Olymel Human Resources team will work closely with all the affected staff on job placement to fill any vacant positions within Olymel’s western hog sector or placement outside the company,” the news release said.

Ferguson added these closures are supposed to be a temporary measure.

“These are units that are still in good shape and when the industry does return to profitability, we hope to see all of these units eventually repopulated,” he said, noting he feels for the workers who will soon be out of a job.

“It’s always tough to maybe lose a job, but there is extremely high demand for workers in agriculture right now and in the hog industry,” he said. “I’m certain the affected workers will be able to find a new role in the industry, whether that’s within Olymel or another company.”

“We have other open positions within our organization,” added Smit. “We’ve had lots of inquiries already from other production companies that might have some vacancies as well to see if we can transfer them. So, I think they’re doing everything they can. And it’s been very busy because I think people do want to stay in the business.”

Olymel said operations at the units will be wound down over the next several months and remain closed until market conditions improve.

–With files from The Canadian Press

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derek.craddock@pattisonmedia.com

Twitter: @princealbertnow