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Toronto slaughterhouse idle as producers hold back hogs

Pork producers are being squeezed by high prices and tight supplies, while facing low-priced imported competition in the grocery aisle.

Ian Willms/Report on Business magazine

The Toronto slaughterhouse that is under protection from creditors has halted operations after being cut off by pig producers who fear they won't be paid.

The plant in downtown Toronto was idle on Monday and Tuesday. A source said any more shipments this week will depend on the resolution of payment talks between producers and the company.

Ontario Pork, which represents 1,600 hog farmers, is trying to get a guarantee of payment from Quality Meat Packers Ltd. and Toronto Abattoirs Ltd., which last week sought 30-day creditor protection under the Bankruptcy and Insolvency Act. Quality Meat, which employs 750 people and slaughters about 23,000 hogs a week, has been in business since 1931 and has operated at its Tecumseth St. plant since 1960.

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"We have initiated our restructuring process and are working towards the goal of getting operations back to normal," Quality Meat vice-president Jim Gracie said on Tuesday. He would not comment on negotiations with suppliers.

"Producers were not paid for hogs last week and they need assurances," said Amy Cronin, chair of Ontario Pork.

A source said the company has asked hog producers for a discount of $30 per hog, with the aim of slaughtering 18,000 a week. But pig farmers have not been paid for last week's shipments, another source said. They are confident they can sell their animals to plants in Quebec, Europe and the United States instead.

Pork producers are being squeezed by high prices and tight supplies, while facing low-priced imported competition in the grocery aisle. The market price of a hog in Ontario was $283 last week, compared with $159 a year ago, as a piglet-killing virus has reduced the U.S. herd count by about 3 per cent. Porcine epidemic diarrhea, which does not affect humans, has been found in dozens of Ontario farms and handling facilities in other provinces.

Mr. Gracie last week said volatile hog prices were the main cause of the bankruptcy filing. Producers have also stopped sending pigs to Great Lakes Specialty Meats Canada Inc. in southwestern Ontario, which is a related but separate company and is not under creditor protection. Great Lakes slaughters and processes about 6,000 hogs a week. Mr. Gracie said the plant ran on Tuesday but not Monday.

Quality Meat's plant is the target of frequent protests by animal welfare groups, including one that said it will hold a protest at the provincial legislature on Wednesday. The group says it wants to end "subsidies" to the pork industry, which it says is cruel, and bad for human health and the environment. In 2010, government aid to Great Lakes included a $2-million grant from the province and a $3-million federal loan.

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