Broad shutdowns of major U.S. meat packing plants due to COVID-19 are deepening woes for Canadian pork farmers, choking food supply chains and snuffing out demand for thousands of baby piglets sold across the border each week.
Pork slaughtering capacity in the United States has fallen by about 25 per cent after at least 13 abattoirs were forced to temporarily halt operations due to outbreaks of the virus, according to the United Food and Commercial Workers International Union.
Those closures include three of the largest pork processing plants in the country — Smithfield Foods in Sioux Falls, South Dakota, JBS pork processing in Worthington, Minnesota and Tyson Fresh Foods in Waterloo, Iowa — which together represent about 15 per cent of U.S. capacity.
With no room at meat packing plants, thousands of pigs remain on American farms, limiting space and demand for young piglets from Canada.
Indeed, Canadian farmers sell about six million piglets or “feeder pigs” to farmers in the United States every year — about 20 per cent of the country’s total. Delivered to finishing barns at an age of 24 days old or 40 lbs, the piglets are subsequently grown to a weight of about 250 lbs and then slaughtered.
Now, problems at the meat packing level have created backups throughout the highly integrated North American supply chain, cratering demand and prices for both live hogs at processing plants and for Canadian piglets at U.S. finishing barns.
“Every day those piglets go on a train to the U.S.,” said Rick Bergmann, a Manitoba pork farmer and chair of the Canadian Pork Council. “But now the finishing barns in the U.S. are jammed up. Farmers down there are telling us ‘if I can’t sell my big pigs how am I going to take your piglets?’”
Bergmann, who typically ships 800 piglets south of the border each week, recently gave a delivery of the animals away for free rather than incur the added cost of keeping them on his farm. With each of the 800 piglets costing $40 to raise, the hit to Bergmann’s bottom line was more than $32,000.
The picture is even darker in the U.S., where discussions have turned to culling herds of animals before they grow too large for slaughter, Bergmann said.
“We’re not there yet, but these are ugly numbers we’re seeing,” he said.
As the spread of coronavirus infections in Canada delays both the delivery of animals into processing plants and the flow of finished pork products to grocery store coolers, the parallel crisis in the U.S. is likely to exacerbate any domestic shortages and price increases here, said Chad Hart, an agricultural economist at Iowa State University.
That’s because, just as Canadian farmers send feeder pigs to the U.S., American farmers send pork products back to Canada, a “rhythm has been messed up by COVID-19 and the closure of plants,” Hart said.
The parallel crisis in the U.S. is likely to exacerbate any domestic pork shortages and price increases in Canada.
Stringer/Reuters files
Much of the reduced supply pumped out by U.S. meat packers is expected to be absorbed by the local market, reducing the potential for American meat to backfill any shortages of Canadian pork.
“We are in a weird situation where pork prices will be rising at the grocery store at a time when hog prices are the lowest in a decade and all because of a pinch point at the processing plants,” he said. “If you’re a hog producer, this is easily the most challenging time you have seen in your career.”
In a full-page advertisement in the New York Times on Sunday, Tyson Foods Inc.’s board chairman John Tyson warned that “millions of pounds of meat” will disappear from the supply chain as the pandemic forces processing plants to close, leading to product shortages in grocery stores.
“The food supply chain is breaking,” Tyson wrote. “Millions of animals — chickens, pigs and cattle — will be depopulated because of the closure of our processing facilities.”
If you’re a hog producer, this is easily the most challenging time you have seen in your career
A cruel twist for farmers is that the bottleneck in processing arrived at a time when global demand for pork exports soared following an outbreak of African swine fever that eliminated half of China’s domestic herd — sending the country on a global hunt for protein.
Canada was expected to benefit from that rise in demand after Beijing lifted a temporary ban on Canadian meat in January. Pork exports to China rose 46.4 per cent in February (before the COVID-19 virus swept through North America) compared to the same month a year ago, according to the Canadian Pork Council. March figures are not yet available.
“This is not a demand problem, it’s a supply chain problem,” Hart said.
But with social distancing and other procedures to protect against COVID-19 likely to be required for some time, jumping on that demand will likely remain a challenge.
“One reason the North American industry is so efficient is we can produce a lot of meat in a short amount of time,” said Hart. “To do that you need a lot of employees working very closely together. So the same characteristics that make our industry efficient are also what this virus preys upon.”
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.
