Maple Leaf Foods adds freight surcharges as Middle East conflict increases costs

Packages of Maple Leaf Foods chicken breasts are shown on a shelf at a grocery store in Oakville, Ont. THE CANADIAN PRESS/Richard Buchan

MISSISSAUGA — Maple Leaf Foods Inc. is passing on fuel price increases to its customers as the conflict in the Middle East remains volatile.

“Geopolitical developments, including the conflict involving Iran, are affecting energy markets and increasing transportation costs in the near term,” said chief executive Curtis Frank on an earnings call on Thursday.

He said the company has tacked on a temporary fuel surcharge to cope with higher transportation costs as fuel prices have jumped.

“This provides transparency around the underlying drivers of those increases and will be removed if or as fuel markets normalize,” he said.

Global oil prices remain high despite hopes a deal between Iran and the United States would allow tanker traffic through the Strait of Hormuz again. The narrow waterway has effectively remained shut since the end of February as Iran retaliated to attacks from the U.S. and Israel — blocking a fifth of the world’s oil supply and pushing fuel prices to near-record highs.

Frank said the company is keeping a close watch on inflationary pressures emerging from the conflict such as high fuel and fertilizer prices, as well as impacts on feed and crop yields from potential inclement weather.

“There’s lots to play out. We watch this weekly, if not daily,” he said.

Mississauga, Ont.-based Maple Leaf Foods reported a first-quarter profit of $46.1 million or 37 cents per share, down from $49.6 million or 40 cents per share a year ago, as its sales rose 6.2 per cent.

Sales for the quarter ending March 31 totalled $962.9 million, up from $906.7 million.

In February, the meat-packaging company increased prices on its products by about 11 cents a kilo or four cents per package of hotdogs and bacon.

Frank said the price increases haven’t affected consumer demand. In fact, Maple Leaf’s poultry sales were up 11.7 per cent, while prepared foods sales increased 2.3 per cent in the first quarter.

Poultry is relatively affordable compared with other proteins, such as beef — one of the reasons why poultry is seeing sales growth, Frank said.

Beef prices have remained elevated for months, helping to push overall food inflation higher in Canada.

However, Frank said it’s unlikely that demand for poultry would fade even if beef prices drop.

“The benefits to the poultry business, I think, are more structural than they are beef-induced, to be honest,” he said.

“The changing face of demographics in Canada, the strength of demand for poultry, the composition of the bird that’s consumed by Canadian consumers today is very favourable,” he said.

The company’s share price on the Toronto Stock Exchange jumped more than nine per cent to $30.76 on Thursday morning.

On an adjusted basis, Maple Leaf said it earned 34 cents per share in its latest quarter, up from an adjusted profit of 21 cents per share in the first quarter of 2025.

Analysts on average had expected an adjusted profit of 30 cents per share, according to LSEG Data & Analytics.

Frank said the company is “firmly on track” to deliver on its 2026 outlook.

“Protein continues to be one of the most attractive and resilient segments in food with demand supported by strong consumer fundamentals and long-term structural growth,” he said.

The results mark the second quarter since Maple Leaf spun out its pork business as a separate entity called Canada Packers.

RBC analyst Irene Nattel said in a note Maple Leaf “delivered solid results, with revenue growth led by poultry helping offset higher but moderating input costs and higher promotional spending.”

She said pricing changes taken mid-quarter should improve profitability as it moves through its next quarter.

This report by The Canadian Press was first published May 7, 2026.

The Canadian Press

Read more:

• Pork company Canada Packers says it is passing high fuel costs on to customers
• Maple Leaf Foods reports $391.2M Q4 profit boosted by spinoff of pork business
• Canada Packers reports $23.2M Q4 profit, sales edged higher