Cargill closes High River beef plant

The Cargill meat processing plant in High River, Alta., which slaughters 40 percent of the cattle in Canada, announced temporary closure effective April 20.

Date of reopening is unknown but the Canadian Cattlemen’s Association said it could mean industry losses of half a billion dollars by June if the closure lasts that long.

Halt of operations at the plant has thrown the cattle industry into turmoil, particularly since slowdowns are also occurring at Western Canada’s other federally inspected plant, JBS in Brooks, Alta. Several plants in the United States that might be alternative destinations for fat cattle have also slowed or temporarily closed in recent weeks.

“Effective today, we have begun the process to temporarily idle Cargill’s High River facility,” Cargill said in a statement.

“Considering the community-wide impacts of the virus, we encourage all employees to get tested for the COVID-19 virus as now advised by Alberta Health Services as soon as possible.”

Cause of the closure appeared to be lack of sufficient workers, many of whom voiced concerns about worker safety to Cargill, chief provincial medical officer Dr. Deena Henshaw and Alberta Agriculture minister Devin Dreeshen during a “telephone town hall” held April 18. One plant employee died of the virus over the weekend, exacerbating worker safety fears. The town of High River had 358 people infected with the virus as of April 17, a dramatic increase over previous numbers. Alberta Health Services has found many of the cases are connected to workers at the Cargill plant and people associated with them.

At a news conference Monday, Canadian Cattlemen’s Association vice-president Dennis Laycraft said the closure increases the urgency for the federal government to act on various recommendations to address the crisis.

“Cargill spoke with us earlier today and they’re going to idle the plant in High River for a short period of time until they’re confident that they’ll be able to bring back a sufficient workforce to operate. Hopefully that’s soon but we have to be prepared that it could go weeks,” said Laycraft.

“We are reaching out again, literally as we speak here with government to express the urgency to get moving on a number of the measures that we’ve been presenting to them over the last number of weeks.”

Those include funding for a set-aside program that would cover costs to put cattle on maintenance rations rather than finishing rations, limit feedlot placements and establish a committee to match market-ready cattle with available slaughter capacity.

As well, the CCA has asked for changes to the Western Livestock Price Insurance Program, including funds to make premiums affordable, and expand it so producers in eastern Canada have access.

An extended interest-free portion of the cash advance payment program and an increase to the overall amount available is also on the list, as is a declaration of COVID-19 as a natural disaster to allow access to funds through the AgriRecovery program.

“We could easily add another half billion dollars in market losses that could be avoided if we’re able to intervene quickly with set-asides, with insurance and at the same time hopefully get these plans up and running at reasonable capacity as soon as feasible,” Laycraft said.

“We are also talking with each of the provinces looking at where we could improve capacity in some of the provincial plants. There is very strong local demand for beef that’s being processed there as well.”

Cargill has implemented numerous procedures to protect workers, including enhanced cleaning and sanitizing, installation of personal dividers, protective equipment and health screening upon arrival at the plant. Those measures have been checked by Alberta Health Services.

“At this stage it’s really about the workforce and getting an adequate number of them available to come in on a regular basis, so they’re working diligently on that,” said Laycraft. “Basically it means they’re not going to be harvesting any cattle until they get that done.”

Feedlots with fat cattle ready for shipping will be the first sector adversely affected. Already facing major per-head losses, they will see further losses if they are forced to keep fat cattle on maintenance rations for any length of time.

Backgrounders will have to make decisions on keeping cattle at home or on grass because feedlots will not be accepting new stock. Cow-calf producers will have to consider the future of this year’s calf crop and how to manage risk should the current situation be prolonged.

Alberta’s NDP opposition and the United Food and Commercial Workers Local 401, which represents most of the workers, called for closure of the plant last week, citing worker safety and the need for a coordinated plan to protect them.

The Cargill plant had temporarily halted its slaughter line last week and ran one shift instead of two, reducing daily slaughter to about 1,500 head daily.  That has now fallen to zero.

Prolonged slaughter plant closure could result in “a wall of cattle” with no outlet unless swift measures are taken, Laycraft said.

CCA president Bob Lowe said last week that the industry was already on edge over plant slowdowns, let alone complete closure.

 “If both of those plants were to shut down completely, then we’re in for a world of hurt,” Lowe said last week.

Added Laycraft on Monday: “Obviously one of the challenges is … it’s affected by the duration of the closure. But we worked our way through this before and it does take a pretty dynamic set of tools to address it.”

Contact barb.glen@producer.com

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