(Image Credit: CFJC Today / Chad Klassen)

By Dylana Kneeshaw

SUPPLY CHAIN INTERRUPTION

Ranchers feeling impact of beef processing plant closures

Apr 29, 2020 | 4:48 PM

KAMLOOPS — The demand for beef is running high during the COVID-19 pandemic, but the recent shutdown of operations at two processing plants in Alberta has caused a snag.

Hundreds of employees tested positive for the virus at Cargill’s meat processing plant in High River, AB, while one employee died — resulting in a closure on Monday. Wednesday (Apr. 29), the company announced it plans to re-open with one shift on May 4.

Meanwhile, a second Alberta plant, JBS, has reduced operations after recording nearly 100 positive cases among its employees.

BC Cattlemen’s Association General Manager Kevin Boon says the hiccup in getting meat to market isn’t expected to last for extremely long, but the effects have already trickled down to ranchers, suppliers, and sellers in the beef industry.

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“Overall, it backs it up through the whole chain, so we could see the results of this in cattle production and what our prices are and everything for the next (few) months, and possibly years to come.”

The two plants account for a large percentage of Canada’s beef processing, and with the pause in operation, ranchers who now have to keep their cattle longer are feeling the cost impact. Boon says on top of the money spent raising the cattle, now ranchers are paying for additional feeding and care while they wait.

“What we do now to manage that inventory, and there are ways of doing it, will be critical for keeping that supply chain moving normally, so there’s some challenges in front of us.”

The demand is there, and industry experts like Boon say it’s a matter of re-connecting the pieces in the production line.

For beef retailers, the supply hasn’t taken a hit, but prices have changed.

“It’s a tight spot for us for sure,” notes Chop N Block Owner Brody White. “We have seen prices on high-demand products like ribeyes, strip loins, top sirloins, go up substantially over the last week. We’re expecting more of the same next week.”

White says consumers likely won’t notice a big difference in how much beef is available for purchase, and if prices get too steep, other products are available.

“There’s always pork and chicken. I haven’t had any issues yet, and supply seems to be really good on that end. There’s not the same scale of production, so there’s not the same bottlenecks when one plant closes down or two plants close down in chicken and pork… there’s more of it.”

While beef industry players wait for operations to resume, Boon says keeping processing plant employees healthy will be key in preventing further interruptions.

“Right now we’re expecting one, but it’s not a panic stage yet. It’s a matter of let’s get our act together, let’s plan it, and let’s get those processors going so we can get some normalcy back in here.”