The beef industry has rebounded after production was slowed by COVID-19 outbreaks at several meat processing plants in April and early May 2020. More than 2,000 cases and four deaths, most of them in Alberta, were attributed to these outbreaks and resulted in temporary closures and slow downs of the major plants that produce nearly 80 per cent of beef capacity. Those closures led to huge backlogs at feedlots, reduced western Canada’s beef slaughter capacity to 25 per cent of normal, plummeted cattle prices by $300-400 per head (the lowest since 2013) and led to scarcity of beef at grocery stores.
It was a grim time for ranchers, feedlot operators and processing plants. Costs soared for everyone, e.g. feedlot operators were losing $500,000 a day paying to feed and retain cattle.
The processing plants worked with health officials to incorporate stringent safety and distancing measures at processing plants as well as the buses transporting workers to the plants. Plants worked at less than half capacity for some time to ensure these changes were working and are now fully operational. Indeed, Bob Lowe, president of the Canadian Cattlemen’s Association (CCA), said, “The two hardest hit processing plants, JBS in Brooks and Cargill in High River, are actually slaughtering more cattle now than they were at this time last year in an effort to meet pent up demand.”
However, ranchers, feedlot operators and processors suffered from the fallout. Industry leaders successfully lobbied federal and provincial governments to create a set-aside program that compensates producers who voluntarily hold back their cattle from market until supply matches demand. The program averted a severe price collapse.
As for the processing plants, the federal government allocated $77.5 million to support safety measures during COVID-19. “But this amount was spread over all plants in Canada whether they were processing beef, fish or lettuce,” said Lowe. “It wasn’t nearly enough.”
However, Lowe applauds the federal government for keeping the borders open for trade to the US and other countries by declaring agriculture an essential service. Though some markets like China slowed, the US and Japan, the biggest purchasers of Canadian beef, never did. And though some of the largest domestic purchasers, like McDonald’s Canada, were forced to temporarily supplement Canadian beef with beef from the US and other countries during the crisis, they are now approaching their stated promise to use 100 per cent Canadian beef.
“We’re still below the five-year average; we’re not normal,” said Janice Tranberg, CEO of the National Cattle Feeders’ Association, in a Calgary Herald story published July 23, 2020 . “But we’ve certainly seen prices come up to a better level than they were a few months ago. Better prices for feedlot operators should translate to better prices for ranchers looking to sell animals during this year’s fall cow-calf run. For consumers, the fact that cattle are moving again should translate to lower beef prices at grocery stores.”
Though Lowe called July “a light at the end of a tunnel” in the Herald story, the crisis has not been fully averted. Feedlots and processing plants rely on migrant workers and very few are being allowed into the country due to the pandemic. “Agriculture has always been short of labour,” said Lowe recently. “Canadians don’t want to work in this industry. We need the government to give greater access to people from other countries who want to come here to work.”
Some of the changes Lowe and other industry leaders want are for agriculture and agri-food business to become a major ministry in government and for consumers and people seeking careers to recognize it as big business. “We need to shift the culture,” said Lowe. “CCA is doing that now by putting the emphasis on food, not beef. We need to have agriculture and food made a mandatory part of the school curriculum. We need to let people know about the sophisticated technology we use for everything from tractors and seeders where satellite mapping recognizes how much seed to dispense by reading soil and moisture, to the technology found on a cow’s ear tag that will instantly produce data about their owner, lineage, health, weight and more.”
As for international trade, marketing agricultural products requires the same education and skill as selling other major commodities, according to Lowe. “There is a lot of innovation in our industry. Ranchers use it when they’re raising cattle, feedlots use it to prepare cattle for market, and the big processing plants use it for on-time delivery and scale. Canada has the safest food system in the world and one of the most efficient. That’s why everyone wants our beef.”