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Maple Leaf Foods: ASF has far-reaching effects

Canadian meat, poultry and alternative protein company Maple Leaf Foods has its eyes on the global African swine fever (ASF) situation, and is adjusting its operations accordingly.

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DCF 1.0
DCF 1.0

Canadian meat, poultry and alternative protein company Maple Leaf Foods has its eyes on the global African swine fever (ASF) situation, and is adjusting its operations accordingly.

Speaking during the company’s earnings call for its first quarter of fiscal year 2019, Maple Leaf Foods CEO Michael H. McCain addressed ASF and how the disease outbreak is affecting or could affect the company.

“It had no effect on Q1, but I would say it’s virtually impossible to predict exactly how this will play out, as it’s beginning to influence global agricultural markets,” McCain said.

“The outbreak in China has far-reaching effects across global agricultural sectors.”

ASF has swept across the marketplace in China, the world’s largest producer and consumer of pork. Current estimates McCain passed along say the country has suffered 25-35 percent production losses.

Impact on pricing

Maple Leaf Foods processes pork products, but it purchases about 60 percent of its supply. Because of that, it is examining price increases.

“One would expect that with significant demand for meat that the price of hogs would go up, but in due course the price of meat will go up as well, to reflect the protein shortage around the world, which undoubtedly will emerge,” he said. “Because the price of meat is going to go up rapidly over the course of the next few months, we are planning price increases to reflect the increased cost of raw materials in our packaged meats business, and we would expect those to be in the market in the third quarter.”

Enhanced biosecurity

While ASF has yet to reach Canada, Maple Leaf Foods is taking no chances with its live hog inventories.

“Countries are stepping up their protection efforts as we are in Canada, which already has some of the best biosecurity practices in the world and has increased inspections in the air, sea and land ports,” said McCain.

“As for our own operations, we are always vigilant and have comprehensive biosecurity and disease preparedness strategies in place. We have further heightened precautionary measures in response to ASF.”

View our continuing coverage of the African swine fever outbreak.

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