'The food supply chain is breaking': Farmers eye culling piglets as U.S. meat packing plants close - Financial Post | Canada News Media
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'The food supply chain is breaking': Farmers eye culling piglets as U.S. meat packing plants close – Financial Post

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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.”

Financial Post

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Roots sees room for expansion in activewear, reports $5.2M Q2 loss and sales drop

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TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.

The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.

“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.

The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.

But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.

Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.

“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.

“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”

Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.

The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.

In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.

Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.

The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.

The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.

Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.

Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.

It will also re-evaluate its design ranks.

Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.

Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:ROOT)

The Canadian Press. All rights reserved.

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Talks on today over HandyDART strike affecting vulnerable people in Metro Vancouver

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VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.

No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.

About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.

Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.

Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.

A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”

This report by The Canadian Press was first published Sept. 12, 2024.

The Canadian Press. All rights reserved.

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Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier

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MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.

The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.

The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.

Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.

On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.

Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.

This report by The Canadian Press was first published Sept. 12, 2024.

Companies in this story: (TSX:TRZ)

The Canadian Press. All rights reserved.

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