The Alberta hog packer war last winter has taken its toll on the first quarter balance sheets of Fletcher’s Fine Foods and Maple Leaf Foods.
Despite a 21 percent increase in sales to $80.63 million, Fletcher’s posted a first quarter loss of $981,000.
Maple Leaf, a more diversified company with pork, poultry, bakery, animal feed and seafood operations in Canada and the United States, saw sales climb 22 percent to $847 million. It posted a first quarter profit of $3.98 million, up 74 percent from the same period last year.
During the four weeks in January and February that Fletcher’s and Maple Leaf offered premiums of as much as $24 a hog, Fletcher’s paid $1.9 million extra for stock to maintain market share. Maple Leaf, which bought Burns and Gainers last October, paid $1.6 million in premiums.
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Competitors react
“Hog premiums resulted from a competitive reaction to our attempts to acquire additional hogs for our newly expanded Red Deer, Alta. hog processing facility,” said Fletcher’s president Fred Knoedler in a news release May 1.
The performance of Fletcher’s prepared foods division helped offset the $469,000 loss in fresh pork sales. Prepared foods grossed $5.36 million, almost double the result in the first quarter last year thanks to the company’s acquisition of Grimm’s Food Group and an increased emphasis on high margin branded products.
Maple Leaf said in its quarterly report issued May 8 that despite the premium war, its meat products group made money, as did its bakery and agribusiness groups.
