Overstocked: Alberta cattle feeders backed up after temporary closure of meat-processing plant

‘40,000 animals ... held on feeding operations. That's the kind of backlog we're looking at’

Travis McEwan · CBC News · Posted: May 04, 2020 8:20 AM MT

Todd Wagner, owner of Fieldstone Feeders, stands near some of the 3,000 cattle he feeds on his property south of Stony Plain, Alta. (Travis McEwan/CBC)

Alberta's cattle feeders are getting a first-hand look at what happens when the industry supply chain is disrupted — and what they're seeing is a growing food bill with too many animals remaining on their properties.

Todd Wagner owns Fieldstone Feeders in Stony Plain, Alta., about 40 kilometres west of Edmonton.

He raises almost 3,000 cattle for a farmer in Lethbridge, Alta. When the animals are ready for slaughter, Wagner ships them south.

But the temporary shutdown of one of Canada's largest meat-processing plants means the Lethbridge farmer isn't accepting cattle, which has led to a backlog on Wagner's farm.

"They're getting backed up with fat cattle that they're not able to get processed and that's backing us up in sending cattle to him," Wagner said. "It's just kind of backing up the supply chain."

A combine rolls across Todd Wagner's field, as remaining crops from 2019 are being harvested. (Travis McEwan/CBC)

It's an issue happening across Alberta.

The Cargill meat-processing plant in High River, Alta., was temporarily closed April 20 after a major COVID-19 outbreak among its employees.

As of Saturday afternoon, 917 Cargill employees had tested positive for the disease, including a worker in her 60s who died. The plant reopened Monday despite strong concerns from the union.

"That plant would process 4,000, 4,500 animals a day. So, that's over 20,000 animals a week," said Rich Smith, executive director of Alberta Beef Producers.

"You take that plant out of operation for two weeks, now there's 40,000 animals that should have gone for processing that have been held on feeding operations," Smith said.

"That's the kind of backlog we're looking at."
Cattle feeders across Alberta affected

The producers who will be affected most are those who are still feeding cattle that are ready to be slaughtered and processed.

"There is absolutely more feed costs. They will keep feeding those animals," Smith said. "They're feeding them lower energy diets so that the animals aren't growing quickly because they're going to have to hold them longer."

When cattle at Fieldstone Feeders weigh close to 450 kilograms, or about 1,000 pounds, they're sent to southern Alberta before going to a meat-processing plant. (Travis McEwan/CBC)

There are price insurance programs for beef producers but premiums have become unaffordable, Smith said.

"Governments already offset premiums of ailing crop insurance and we'd like to see them do that for cattle producers," he said.

Rich Smith, executive director of Alberta Beef Producers, says cattle feeders are seeing increased feed costs as a result of the temporary closure of the Cargill meat-processing plant near High River, Alta. (Submitted by Rich Smith)

Wagner said that he will keep feeding the cattle on his property and prepare for his fields for the upcoming growing season.

He said he'll stay focused, adapt and hope for the best.

"I hope it levels out for us. People need to eat," he said. "That's our business. We're going to carry on with that."

ABOUT THE AUTHOR


Travis McEwan
Videojournalist
Travis McEwan is a video journalist, who has not won any awards. Originally from Churchill, Manitoba, he's spent the last decade working at CBC Edmonton. Email story ideas to travis.mcewan@cbc.ca

Coronavirus: What closures and restrictions on Canada’s 2 largest meat packing plants means for the cattle industry

CLICK HERE TO WATCH VIDEO
https://globalnews.ca/video/rd/dc20a3f6-85b5-11ea-a3f2-0242ac110006/?jwsource=cl

Alberta produces more than 70 per cent of Canada’s beef. Now, with its two largest facilities impacted by more than 500 cases of COVID-19, the industry isn’t receiving the success 2020 initially had in store. Eloise Therien reports.

• 2 employees of Mountain View Poultry plant in Okotoks test positive for novel coronavirus

BACKGROUNDER
2 Alberta meat plants affected by COVID-19 make up 70% of Canada’s beef processing capabilities

BY ALEKSANDRA SAGAN THE CANADIAN PRESS April 23, 2020

WATCH ABOVE:

https://globalnews.ca/video/rd/dc20a3f6-85b5-11ea-a3f2-0242ac110006/?jwsource=cl

 Alberta produces more than 70 per cent of Canada’s beef. Now, with its two largest facilities impacted by more than 500 cases of COVID-19, the industry isn’t receiving the success 2020 initially had in store. Eloise Therien reports.

The temporary closure of an Alberta meat processing facility due to a COVID-19 outbreak isn’t expected to result in beef shortages, but the reduction in capacity will mean that ranchers will bear the brunt as their costs rise and prices for their product fall.

Cargill Inc.’s High River, Alta., plant temporarily shuttered operations Monday after a worker died from the coronavirus and hundreds of other employees tested positive.

Meanwhile, a second plant — JBS plant in Brooks, Alta. — recorded 96 cases as of Wednesday. It has reduced operations, according to the Canadian Cattlemen’s Association, which represents the 60,000 beef farms and feedlots in the country.

The CCA says it is trying to ensure the facility remains open, though a union representing federal meat inspectors says it’s a matter of time before it is forced to temporarily halt production.

LISTEN BELOW: Dr. Mike von Massow, associate professor – Food, Agricultural and Resource Economics Department at The University of Guelph

These two facilities make up 70 per cent of Canada’s beef processing capabilities, according to the CCA.

Occupational Health and Safety is conducting investigations looking into “potential exposure of workers” to the novel coronavirus at both the Cargill and JBS plants.

Alberta’s chief medical officer of health Dr. Deena Hinshaw confirmed Wednesday one JBS worker had died but the cause of death is not known. It is not known to be a case of COVID-19, she said, so an investigation is taking place to determine the cause.

Alone, the Cargill plant processes some 4,500 head of cattle daily or more than one-third of the country’s total beef-processing capacity.

With the Cargill closure and JBS’s reduction, Canada has likely seen a reduction of nearly 40 per cent in its processing capacity, said Mike von Massow, an associate professor in the food, agricultural and resource economics department at The University of Guelph.

However, shoppers aren’t likely to see empty freezers in the grocery store meat section any time soon.

“In the short run, I don’t think we as consumers will see any tangible difference,” he said

The prime minister echoed that message Tuesday, reassuring Canadians they would continue to find beef products on grocery shelves.

“We are not at this point anticipating shortages of beef, but prices might go up,” said Prime Minister Justin Trudeau during his daily update on the coronavirus pandemic.

“We will of course be monitoring that very, very carefully.”

https://globalnews.ca/video/rd/cc388ff8-84ed-11ea-8c0d-0242ac110002/?jwsource=cl

COVID-19: Brooks mayor responds to skyrocketing confirmed cases, meat plant concerns

Beef producers and associations have said they will prioritize ensuring Canadian supply before exports, he said.

Canada exports about 45 per cent of its beef and cattle production annually, according to the national association, and ships to 56 countries, with the U.S. receiving 74 per cent of beef exports.

The closure is expected to be brief.

It’s likely the Cargill plant will be closed for about two weeks — the duration of the virus’s incubation period, said von Massow. That’s roughly how long the temporary closure of a pork processing plant in Quebec lasted.

Olymel announced March 29 it would temporarily close its hog slaughter and cutting plant in Yamachiche, Que., for 14 days after nine plant employees tested positive for COVID-19. The closure gave employees the time to self-isolate at the recommendation of the public health department. The plant resumed operations on April 14.

A two-week closure allows staff to self-isolate to prevent further spread, deep clean a facility and implement any other measures to help physical distancing after reopening, said von Massow.

During a closure, inventories can be diverted and processing capacity can be increased at other facilities to avoid a shortage, he said. It would take months-long closures, as well as multiple plants shuttering to create a possible shortage.

Ranchers, though, are likely to suffer even from these short-term closures, he said.

If they have to send their cattle further for processing, transportation costs rise and that will come out of the price they’re paid for their product. If they decide to hang on to their animals longer, they’ll face increased overhead costs, like feed, said von Massow

In the past week, ranchers have seen a nearly 30 per cent drop in price, said Dennis Laycraft, executive vice president at CCA.

The group’s economic scenarios project the industry could lose more than $500 million in revenue by the end of June. It is calling for immediate government action.

That includes improving the availability of cash advances, said Laycraft.

“It’s not easy to deal with lenders when the value of your product is falling sharply and no one’s really sure what it’ll be worth in that environment.”

The group also wants price insurance program premiums brought back down to normal levels, he said.

“For young and newer producers that have more debt, that’s a pretty important thing.”