Bottlenecks at pork slaughterhouses due to COVID-19 are creating a cash crisis for farmers, raising fears of bankruptcies at the farm level and threatening the flow of Canadian meat to grocery store coolers.
A cluster of coronavirus outbreaks has bedevilled meat-packing plants in recent weeks, forcing the temporary shutdown of some facilities and the imposition of strict social distancing and safety measures in others.
Olymel, the country’s largest pork processor, was forced to close a plant in Yamamiche, Que., for 14 days after nine employees tested positive for the virus. The company reopened that plant last week and has introduced new safety protocols at three of its six slaughterhouses.
While the measures are necessary to keep employees safe and prevent a total shutdown of facilities, they are also dramatically reducing the number of animals moving through the plants, creating a backlog on farms that is costing farmers between $30 and $50 per animal — or roughly half their value, according to the Canadian Pork Council. Most of the country’s 13 pork processing plants are now operating at reduced capacity as infection control measures are carried out.
The organization is seeking aid from the federal government to keep farmers afloat.
“We are asking the government for an emergency payment of $20 per hog so that pork producers can continue to pay bills, feed pigs and keep producing food for Canadian families,” said Rick Bergmann, chair of the council. “Without it, family farms will be lost. In turn we will continue to see disruption in the food supply chain, and increased food insecurity as supplies tighten and food becomes even more expensive.”
Olymel is the country’s largest pork processor.
Ryan Remiorz/The Canadian Press files
The federal government is working with the provinces to support farmers and ensure availability of meat products, according to Marie-Claude Bibeau, the federal Minister of Agriculture and Agri-Food.
“We understand the repercussions the short-term capacity reduction in certain meat processing facilities is having on livestock producers,” the minister said in an emailed statement.
Canada exports about 70 per cent of its pork production annually and relies on imports for some domestic needs. The country could expand its imports to backfill domestic production, although other countries are at risk of running into the same problems in their slaughterhouses, said Gary Stordy, director of government and corporate affairs at the Canadian Pork Council.
“We have to remember also, that countries around the world are putting export restrictions on food,” he said.
The volume of hogs slaughtered in Canada fell by 16.2 per cent for the week ending April 14, as Canadian farmers struggled with a combination of depressed market prices, rising feed costs and lower returns on oversized hogs.
Indeed, as processing plants take fewer animals, farmers are being forced to pay more to continue to feed them. The hogs in turn are getting larger — a problem for farmers who are paid less for animals that have grown beyond an agreed-upon size.
Most of Canada’s 13 pork processing plants are now operating at reduced capacity as infection control measures are carried out.
Hyungwon Kang/Reuters files
“There is a weight and size producers are expected to deliver and they get penalized if they aren’t within those specifications,” Stordy said.
At the same time, a swath of meat processing plants have also been forced to close south of the border due to COVID-19 outbreaks, exacerbating an already significant oversupply of American hogs. That’s driven down market prices to roughly US$45 per hog from a more typical US$55 a hog for this time of year, said Ken Ball, a senior commodity futures adviser at PI Financial. Canadian hog prices are tied by formula to U.S. prices.
“The system was taxed even before this and now even the plants that are open are slowing down,” Ball said. “Eventually market hogs will build up and swamp the market.”
Hog prices typically rally to US$80 or more between May and July, he added.
“The concern now is that seasonal rally just won’t happen this year,” he said. “And without that rally, farmers are going to be hurt even more.”
Olymel now has three of six plants operating at full capacity, said Richard Vigneault, spokesperson for the firm. The Yamamiche facility, which usually processes 28,000 hogs each week, moved 4,000 as it reopened last week and is expected to hit 17,000 this week, he said.
“We have implemented a lot of measures to reduce to zero if possible the risk of contamination,” he said. “We are all trying to adapt and adjust and cope with this situation as best we can.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
