- news, features, articles and disease information for the swine industry


Pork Commentary: Maple Leaf Foods Steps up to Buy Puratone Corporation

06 November 2012
Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.

CANADA - Last week Maple Leaf Foods announced that it has entered into a definitive agreement to acquire the Puratone Corporation, a Manitoba hog production company (approx. 25,000 sows) for approximately $42 million including livestock, facilities, and interests in some joint ventures, writes Jim Long.

The transaction is expected to close within a month, subject to court and regulatory approvals.

“The acquisition will insure a consistent supply of hogs to our processing facility in Brandon, (Canada’s largest plant 84,000 a week), which is an integral supplier to our value added prepared meats and pork business,” said Michael H. McCain, President and CEO. “We look forward to welcoming Puratone employees to Maple Leaf and benefiting from their experience and strong commitment to best practices.”

“The agreement reached with Maple Leaf represents a tremendously positive outcome and we are very pleased with the stability it provides our stakeholders, particularly our employees,” said Ray Hilderbrand, President and CEO, Puratone Corporation.

Puratone operates about 50 barns in the province of Manitoba in proximity to Maple Leaf’s Brandon plant and produces approximately 500,000 hogs annually. Puratone also operates three feed mills that provide a supply to support their production operations. With this acquisition, Maple Leaf will own approximately 30% of its hog supply to Brandon and produce approximately 1.2 million hogs annually. An integration team will lead the process of thoughtfully integrating both operations. No immediate changes are anticipated.

“The investment reflects our ongoing commitment to securing a strong future for our value added product pork operations in Manitoba, which are a vital part of the province’s economy.” Concluded Mr. McCain “We will continue to manage our operations with a strong commitment to best practices and environmental sustainability.”

Our Observations

Puratone which was in bankruptcy protection had a debt of $92 million was also in breach of its loan covenants. Maple Leaf’s purchase of Puratone for $42 million would indicate a $50 million creditor shortfall. Maple Leaf appears to have made a hard bargain.

Maple Leaf’s purchase makes a lot of sense with their current hog production base in the same area as Puratone’s, the ability to consolidate and streamline management, production flow, supervision, etc… is very evident. The word synergies are over used by it is obvious the opportunity is there.

Puratone feed mills geographic location relative to Maple Leaf’s current and future production is complementary and will allow better transportation efficiencies.

Western Canadian hog producers should view the acquisition of Puratone as positive. Maple Leaf’s investment shows their real commitment to their flagship Brandon plant.

HyLife, which until the Maple Leaf acquisition of Puratone, was Canada’s largest hog producer and owner of the Springhill Manitoba hog plant (20,000 per week) could be perceived as the loser in the Puratone Corporation purchase. Recently they were receiving hogs from Puratone, in the future not much chance that will continue with the Maple Leaf purchase. It has been reported that HyLife was looking at purchasing Puratone, if they were – they were out bid. We can’t see where HyLife wins in this scenario. They now have a multi - billion dollar company fully engaged and committed in the production – packer business in the same area. The packer business is for real big boys, ie. Cargill, JBS United, Maple Leaf, Tyson, Smithfield, Olymel, Hormel, etc… all billion dollar companies with the resources to push hard and fast.

In the end President – CEO Michael McCain, the Maple Leaf team and shareholders stepped up. This is a commitment to Western Canada’s hog production present and future – a real positive sign.


Since mid - September early wean pigs have been on a tear from $8.00 to last week cash early weans averaged $43.76 each. That is a jump of $35.00 per head. We also had quite reliable reports of large groups (3,000 each) of early weans for late November – early December delivery from $54 - $58.

These prices are by all reports due to lack of supply relative to demand. The large liquidation of sows that were producing small pigs for sale is coming home to roost. We can list 50,000 (U.S.A. – Canada) sows of small pig production that have gone out of business since July. That is over one million pigs of production. We also know that there are a lot more farms that we don’t know who have quit or have cut back.

We believe the U.S.A. – Canada breeding herd continues to shrink. Farrow to finish producers are losing $20 per head. Sow slaughter (mid – 60,000’s), gilt sales and gilt retention delays indicate the liquidation trend continues. From June 1 to September the USDA reported a breeding herd reduction of 72,000. We expect when the dust settles on January 1 the U.S.A. – Canada breeding herd will be 200 – 250,000 smaller than June 1st. We believe that market hog prices in the summer of 2013 will hit record highs. The rapid increase of cash early wean prices is a true indication of the lack of supply of hogs coming for next summer.

Author: Jim Long, President & CEO, Genesus Genetics

To find out more about Genesus Genetics,
please take the time to visit their website at

The opinions expressed in this commentary are entirely those of the author and can not taken to represent the views of, its owners or its management.

Share This

News By

Related News

Mexico Pork Market

News from Mexico  21 October 2016

China Hog Market Report

News from China  13 October 2016

More News

EU Pork Exports Slowing Down

News from European Union   21 October 2016

Our Sponsors


Seasonal Picks

The Commuter Pig Keeper - 5m Books