Olymel, the agrifood arm of Quebec’s Sollio Cooperative Group, announced Friday it has served 80 employees with layoff notices at five sow units in Alberta and one in Saskatchewan.

The unit closures — Pinnacle 1 and 2, Dynacrest 1 and 2 and Smoky Sow/Dev in Alberta, and Olysky’s Kelsey unit in Saskatchewan — will reduce Olymel’s company-owned sow herd in Western Canada to 40,000 sows, down from 57,000, the company said.

That reduction is expected to translate to a net production cut of about 200,000 company-owned market hogs per year.

Olymel said the impact of that supply cut on operations at its hog slaughter plant at Red Deer, Alta. “will not be felt until 2024 at the earliest” and would depend partly on hog supply availability from independent producers.

The company didn’t give a hard date for the closures in its release Friday, but said the affected sow barns’ operations will be wound down “over the next several months” and the barns will stay closed “until market conditions improve.”

READ MORE: Meat industry hits hard times

“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 in Friday’s release.

“Now, coupled with stubbornly high feed costs, resulting in unprecedent losses in the hog sector, we have little choice but to retract and position ourselves for success in the future when conditions improve.”

Olymel’s fresh pork business in Western Canada took a hard hit in the company’s 2022 fiscal year, largely from “higher grain, labour and transportation costs, as well as the closure of the Chinese market in the first three quarters of the fiscal year for a second consecutive year.”

In Sollio’s fiscal 2022, its Olymel division alone booked a loss, before income taxes, of $445.7 million for 2022, following a $71.8 million loss for 2021.

Olymel had already been in deep cost-cutting mode for months. Last fall it cut dozens of administrative and management positions through attrition and layoffs, and since then has permanently closed three pork further-processing plants in Quebec.

After announcing it intended to reduce its total hog slaughter, Olymel last month reported it will permanently close its hog slaughter plant at Vallee-Jonction, Que. by Dec. 22.

Olymel and other packers operating in Quebec last month also announced a new supply deal with that province’s hog producer organization, les Eleveurs de porcs du Quebec.

To reduce the effects of the Vallee-Jonction plant’s closure on Quebec hog producers, EPQ said at the time, the new deal calls for Olymel specifically to cease buying market hogs from neighbouring Ontario.

Olymel’s remaining hog slaughter plants in Canada include the facility at Red Deer and its plants at Princeville, St-Esprit and Yamachiche, Que. — Glacier FarmMedia Network

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Calgary-based, publicly-traded Cervus announced Friday it will buy Red Deer-based Deermart Equipment Sales for an undisclosed sum.

Deermart, owned by John Donald, Jack Donald and Abe Derksen since 1982, is the latest in a line of Deere dealerships in Red Deer dating back to 1921.

The Red Deer company is expected to join the Cervus dealership network effective Dec. 3, joining 14 other Deere farm equipment dealerships in central and southern Alberta.

“We are pleased to welcome the Deermart team to the Cervus organization and look forward to building on the success they established over the past 36 years,” Cervus CEO Graham Drake said in a release.

Cervus, which already operates the former A.R. Williams forklift and telehandler dealership in Red Deer, has stakes in 62 dealerships in Canada, New Zealand, and Australia, also including five Deere ag equipment dealerships in Saskatchewan and one in Creston, B.C.

Through this deal, Cervus said, Deermart’s Red Deer customers can expect “unmatched service and support including access to Western Canada’s largest parts inventory and a wide selection of new and pre-owned agricultural equipment.” — Glacier FarmMedia Network

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Cambridge, Ont.-based GVF Group announced Thursday its Farmers Farmacy business, previously available only to producers in Ontario, the Maritime provinces and Quebec, now also serves Alberta, Saskatchewan and Manitoba.

“A lot of the progress of Farmers Farmacy has happened very organically, driven by the evolution of the marketplace and our farmer customer base,” GVF vice-president David Ross said in a release. “The new western expansion is another natural next step.”

The company began shipping goods to the Prairies at the end of June and will offer physical pickup and in-store ordering at the Lethbridge, Red Deer, Brandon and Winnipeg locations of another GVF subsidiary, mineral premix manufacturer Fortified Nutrition Ltd.

Orders can be made online, by phone or fax or at one of the four locations for pickup within two weeks, the company said. Shipping to one of the four pickup points will be free on orders with a before-tax value of $500 or more.

The company last year opened a retail store at Brandon but said it will now transition that operation to a Farmers Farmacy ordering and pickup point.

“The world of retail and distribution is constantly evolving, with advances in e-commerce and on-demand, direct-to-customer options leading the charge,” GVF CEO Ian Ross said in the same release.

“This presents exciting opportunities to bring innovative models and options to the marketplace — including new ways of bringing enhanced convenience, efficiency and value to farmers.

Farmers Farmacy is billed as offering a “full catalogue of over 1,700 items ranging from animal health products to barn equipment, maintenance supplies and work clothes.” The company said its online retail items cover a “complete range” of options for dairy, swine, poultry, beef and sheep operations.

The Farmers Farmacy business started in 1996 as a service offered to premix customers of GVF Group’s flagship operation, Grand Valley Fortifiers, running out of a back room at the Grand Valley premix plant.

Farmers Farmacy relocated in June to a 23,000-square-foot space in Cambridge, including a physical retail outlet.

The company said its Cambridge staff will be “directly involved” in serving Prairie customers alonside local staff at the Fortified Nutrition stores. — AGCanada.com Network

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Pork and poultry processor Olymel, owned mainly by Quebec agribusiness co-operative La Coop federee, announced Monday it will put up $2 million to convert a section of the Red Deer plant for sausage production.

The investment, Olymel said, is meant to equip the plant to supply fresh sausages for the western Canadian market, requiring “modernized” refrigeration facilities plus new equipment in a separate section of the plant.

The conversion work is expected to begin this month and to create 20 jobs on top of the plant’s current workforce of over 1,400, the company said.

“The new section for fresh sausage production at the Red Deer plant is an integral part of an investment plan directed at greater penetration in the western Canadian market, to meet growing demand for sausage products manufactured in Canada,” Olymel CEO Rejean Nadeau said in a release.

Sausage production at Red Deer is also expected to reduce the company’s product transit times into its markets in the West, Olymel said, so its customers “will therefore benefit from product with better shelf life.”

Olymel has operated at Red Deer since 2001, when it bought the hog slaughter and butchering plant from Premium Brands, then known as Fletcher’s Fine Foods.

The Red Deer plant “is diversifying its local activities and enabling it, among other things, to add value to some of its raw materials,” Nadeau said.

Making sausages at Red Deer will also “enable Olymel to expand its business base and serve the western Canadian market even better in product categories such as breakfast and fresh sausages, as well as bulk sausage meat,” the company said.

Olymel’s main sausage operations in Canada right now are centred around its Lafleur plant in the Quebec City area, at St-Henri-de-Levis.

That plant, which came to Olymel when it bought the Supraliment division of Groupe Brochu in 2005, has capacity to process over one million pounds of pork products per week, the company said on its website.

La Coop federee in late June announced it had picked up a $200 million investment from National Bank of Canada, the Fonds de solidarite FTQ, Fondaction CSN and Capital regional et cooperatif Desjardins (CRCD) to help finance “acquisition and capital investment projects,” in part to expand its agrifood activities across Canada.

La Coop also said last year it planned to offer a minority stake in Olymel for sale, to help fund expanded hog production and in turn boost the Red Deer plant’s output. — AGCanada.com Network

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The company announced Monday it would start construction “immediately” at a site near Bowden, Alta., about 40 km south of Red Deer, to start taking grain in 2017.

The facility, when complete, will have storage capacity of over 55,000 tonnes plus a “highly efficient” loop track system, with capacity to load a 150-car unit train in seven hours, the company said.

The new facility will be built with a dual receiving area for trucks and “extremely convenient” access off Highway 2, allowing for “quick turnaround times for off-farm deliveries.”

“As the first in the industry to utilize the loop track design in Canada, Paterson has been able to minimize train loading times, setting a new industry benchmark at its loop track sites,” the company said.

Grain from the Bowden site — the company’s fourth terminal in the province — will be destined for export via Paterson’s Alliance Grain Terminal in Vancouver.

Bowden, which is served by Canadian Pacific Railway (CP), has one other elevator, a 1,200-tonne capacity site operated by grain handler and pulse processor W.A. Grain. — AGCanada.com Network

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La Co-op would retain control of Olymel, which along with Maple Leaf Foods is one of Canada’s two big pork processors.

The co-operative, which had $6 billion in revenue for the year ending Oct. 31, 2015, plans to expand hog production in Western Canada to increase processing at its Olymel slaughter plant at Red Deer, Alta., and is also hunting for partners in farm supply stores, he said.

The CEO said La Coop plans to spend $300 million over five years on expanding hog production and investing in stores.

Selling a large stake in Olymel would help fund the expansion, which is aimed at competing with U.S. packers such as Tyson Foods and Hormel Foods, Desroches said.

“The goal we have is to increase the chain’s value,” he said. “It’s a coordination of every step in production to the customer.”

Olymel had revenues of $2.8 billion last year.

Desroches said La Coop wants a strategic partner, another company already in the hog business, in Olymel.

He declined to say how much interest he has received.

La Co-op has no plans to change its structure, including any initial public offering, Desroches said.

–– Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg.

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