With meat packing plants either closed or under pressure to close due to major outbreaks of COVID-19 among processing staff on both sides of the border, there will be significant short term and medium term impacts on Western Canada’s livestock industry.
“It’s not just Cargill (in High River), says Chuck MacLean, owner of South Island Feeders in Bow Island and former chair of Canada Beef. “It’s a lot of plants all over Canada and the U.S. Right now we have pork plants down, we have a major plant in Greeley (Co.) down. The plants are trying to run, but what are you going to do under the circumstances, eh? The virus has got the whole country shut down.”
MacLean said the news Cargill in High River was closing down and a new outbreak among meat packers at JBS Brooks were turns he dreaded.
“When you look at what happened to Cargill, it appears to me sooner or later (JBS) is going to have to shut down too,” MacLean said,“because they need to get people at these places tested. They have so many people working there, and then you have to worry about the cross-contamination from one person to another. They just need to find how to get it stopped.
“It’s just seems to be a bit of a conundrum, because I don’t know how you keep running and still have people getting sick.”
MacLean anticipates a “tough ride here for a ways” for the cattle industry, and for the meat protein industry in general as similar outbreaks are occurring in pork, chicken and other plants across North America.
But, for MacLean, of course, the immediate concern of the potential loss of Cargill and Brooks for an extended period of time hits home for both he and other cattle feeders in Southern Alberta.
“What that does is it backs up a lot of cattle, and every day you feed them they get bigger,” he said, “which actually decreases their value. It’s a conundrum because we don’t know how far they are backed up.
“If it were just one plant maybe it wouldn’t quite be so bad, but Harmony in Calgary because they were down pretty near a week. This (COVID) thing is going to grow on itself. And if something happens where JBS Brooks runs into the same issue, it just grows on itself even more.”
Cargill’s High River plant announced on April 20 it was closing temporarily to help stem the spread of COVID-19 through its staff. By the last week of April there were also nearly 200 cases of COVID-19 reported in Brooks, many associated in some way with the JBS plant. The plant continued to operate at reduced capacity, but expectations were at that time it would eventually have to close also.
While livestock producers would likely not feel it as much in the short term, said MacLean, cattle feedlots like his were bracing for major backups and a lot of bottom line pain.
“The ranch side of it is probably not affected as quickly as what the feedlot side is,” he stated. “The ranch side is affected when you bring your feeder cattle to town whether they are calves or yearlings. But for us, and a lot of other feedlots in the region, there were cattle that were ready for harvest, and cattle that were ready to go to the plants. And actually we had cattle this week that were scheduled (for slaughter) that we don’t know when they will leave now.”
The High River plant processes about 4,500 cattle per day when it is going strong and JBS Brooks processes about the same number. You just can’t make up that kind of production with any extended shutdown, said MacLean, and in the meantime cattle keeps on backing up.
Many producers and feedlots have put forth the suggestion to governments that protocols similar to what happened during the BSE Crisis be brought back to help deal with COVID-19.
“This is a little bit similar to BSE if you are a feedlot operator,” MacLean said. “Because if these cattle can’t go to slaughter, and that’s what happened when we had BSE, after a while there was no place to go with them. When you can’t get your cattle in the line to get to the finished product, it creates a shortage all the way along on one end, and it backs ‘em up on the other end.
“The minute these cattle start to back up, unless you are contracted or insured in some manner, sooner or later the market will be under some huge pressure.”
Many in the industry are looking for short term government support to bolster the meat packing and cattle feeding industry until plants can re-open and get back to near their pre-COVID capacity again.
“The cattle industry is looking at any kind of program they can have governments’ help with to get us through the main losses,” he confirmed.
“Right at the moment nobody knows how long this (virus) is going to take, and all the markets were under pressure, and that was before the plants started to close.”