Independent producers will be spared any impact from cutbacks announced in January at Olymel’s Red Deer processing plant, says a company spokesperson.
Corporate Communications Director Audrey Giboulet, in a statement to news media on January 4, said the plant was overstaffed by 200 people, anticipating that 100 staff would be laid off in the coming weeks. The layoff reflects a reduction in the number of pigs being processed.
The slowdown in processing is a direct result of the decision early last year to reduce the sow herd in response to loss of profitability in the hog sector, Giboulet said in an email to Prairie Hog Country on January 26.
“The reduction in slaughter volumes at the Red Deer plant results from the decision announced by Olymel in May 2023 to close five maternity units and reduce the sow herd by 17,000 sows. This represents around 200,000 fewer pigs slaughtered at the Red Deer plant,” she wrote.
That decision reduced Olymel’s total sow herd in Alberta and Saskatchewan to 40,000 head. CEO Yanick Gervais said at the time that the impact of the herd reduction would not be felt until 2024.
“This difficult decision was made in response to the non-profitability of the hog sector, particularly in Western Canada, where feed costs remain very high, generating considerable production costs,” Giboulet wrote in her email to Prairie Hog Country.
“When the hog sector returns to profitability, Olymel may reconsider its decision and increase production again unless other producers want their own production.”
In an earlier statement to local press, including the Red Deer Advocate, Giboulet said layoffs were to be phased over a number of weeks. Early retirement incentives have been offered to workers who are 60 or over or who have worked at the plant for at least 10 years.
Some workers may be recalled if markets improve, she said.
The Red Deer Advocate reports that Olymel had ramped up production following the 2020 COVID-19 pandemic and, in 2021, was among the city’s largest employers with about 1,800 staff. •
— By Brenda Kossowan