TORONTO – Volatile raw material costs dragged on first-quarter earnings for Maple Leaf Foods Inc.

For the first-quarter, Maple Leaf Foods reported an adjusted operating earnings loss of C$29.9 million compared to a loss of $27.9 million in the comparable year-ago quarter. Net loss from continuing operations was C$124.6 million compared to C$30.6 million a year ago.

"Although our financial performance is challenging in transition, particularly with volatile raw material costs, our first quarter was marked by significant accomplishments," said Michael McCain, president and CEO. "Our prepared meats network transition continues to proceed on course as we ramped up production at our new flagship facility in Hamilton and materially improved performance in our Western Canadian plant expansions. The first of five plant closures occurring this year was completed early in the second quarter."

In the Meat Products Group, sales advanced 4 percent to C$705.4 million, according to the company. Higher volumes and price increases lifted sales. Higher pricing for fresh pork and increased volumes in fresh poultry more than offset weak pork volumes.

"The prepared meats business continued to execute its strategy to establish a low cost supply chain by consolidating its manufacturing network, including commissioning activities at its plant in Saskatoon, Saskatchewan and the new Heritage plant in Hamilton, Ontario," the company noted.

Raw material and inflationary costs not offset by pricing severely squeezed margins in the prepared meats business. Pork input prices jumped compared to a year ago due to the porcine epidemic diarrhea virus outbreak in US hog production herds. Prices for hogs sharply increased in response to a decline in hog supply, the company said. A weak Canadian dollar also contributed to higher input costs.

"Pork markets have been impacted in an unprecedented way due to a virus in the US hog industry, which has renewed pressure from a sharp rise in raw material costs," McCain said. "We have accelerated price increases in the second quarter to recover margins, and expect the effects of this to be transitory as the industry is forecasting a return to more normal conditions later in 2014."