Canada exports more than 70 percent of its live hogs, and Ontario is Canada’s largest producer of market-weight hogs, with the majority transported to the U.S. for processing. In late 2023, Olymel, one of Quebec’s largest processing facilities was closed. This has only put more pressure on an existing Ontario processing shortage. According to industry estimates there is currently a need for between 20 and 25 thousand processing spaces for Ontario hogs, weekly.
For Stewart Skinner, a producer who farms in Perth County, located in south-central Ontario, all of his market-weight pigs are transported to a U.S.-based processor packer. Skinner says that while he has an excellent relationship with his U.S. buyer, he would much rather have the Canadian industry and government invest in domestic industry and keep hundreds of dollars per animal in added value in Canada.
“All of our pigs, every single pig we raise ends up in the States, and we’ve got a really good chain that we’re in. But that does remain, at an industry level, a challenge. Every week, we’ve got 20 thousand animals leaving this province, and each one of those animals represents three- to $500 of economic activity.”
Last year, nearly three million hogs were shipped out of Ontario for processing because of a shortage of facilities in eastern Canada. Some of those pigs went to Manitoba, but about four times as many Ontario hogs were shipped to U.S. processors. Skinner says that, while trucking costs are high, Ontario producers have a relatively low cost of production, which was not always the case when competing with American hog producers.
“What we have going for us in Eastern Canada is we have competitive costs. Gone are the days when Iowa had the cheapest corn. Iowa has some of the most expensive corn in North America, and eastern Canada is coming in on the lower end. The challenging point has been and will continue to be, not enough processing in eastern Canada. We’ve got five thousand pigs a week leaving Ontario to go to Brandon, Manitoba, and 10 to 15 thousand pigs a week leaving to go to the U.S. every week.”
American processor demand for Canadian hogs continues to be strong. With extremely high costs to expand or build new processing facilities in eastern Canada, Skinner does not see the situation changing anytime soon.
“I think a lot of processing expansion is going to be limited by the sheer cost of building. Infrastructure has gotten so high it’s gotten very difficult to put together a good business case. We’ve got good costs on the production side but, unfortunately, like so many other industries, fail to add value at the processing stage. And there continues to be healthy demand in the US. packers down there want pigs.”