A draft report on Canadian meat processing capacity was to be considered March 23 by the federal standing committee on agriculture and the Canadian Cattlemen’s Association is hopeful it will include several requests made during presentations earlier this month.
Among them is creation of a red meat development fund, a request that has been on the list since 2018.
CCA executive vice-president Dennis Laycraft said such a fund would be useful for two main reasons: investment to address meat segregation requests that stemmed from international trade agreements; and the desire for more livestock slaughter options in general.
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“We talked to all of the packing plants pretty much across the country back when we were developing that original recommendation,” said Laycraft.
“Particularly the small- and medium-sized plants all indicated that they were open to looking at some modifications to their operations so they could increase their capacity, both throughput and storage capacity.”
The proposal calls for federal matching funds to dollars invested by the red meat sector.
Producers see a 1.3 percent drop in prices for every one percent of overcapacity in the processing sector, said Laycraft.
“You almost need to over-spec some of the capacity so you can absorb more when you do have individual slowdowns … but it doesn’t make for a good business model just to pencil that out, so that’s where the matching money helps.
“A big part of our competitive bidding and capacity is access to U.S. plants.”
American plants, particularly those in the East, are reluctant to buy Canadian cattle for eventual export to South Korea because of a unique trade clause.
If Canada finds another case of BSE, exports to South Korea would be suspended. That makes U.S. plants nervous about buying Canadian cattle and mixing it with U.S. inventory exported to South Korea, Laycraft said.
The other question that arises in discussions about slaughter capacity is the size of the operations that are needed or desired.
“It really is a combination. The large plants are really important as we’re trying to satisfy large customers around the world. The medium-sized plants have a clear niche as well, and then the smaller plants, particularly as we move forward, we saw during COVID, this great interest in locally produced product and being able to access through local vendors.”
Laycraft said Canadian requirements for the removal of specified risk materials from animals older than 30 months, instituted as a response to BSE, are problematic for smaller plants. It is labour intensive and involves the need to discard about 52 kilograms from each animal. That affects profitability.
Labour is another significant factor that hinders establishment of new processing plants and it is an ongoing challenge for large ones. With labour shortages already evident for existing plants, expansion is less attractive.
Though automation in a new facility could help with that, “there is no technology right now that works as well as a highly trained meat professional,” Laycraft said.
There have been a few positive developments in slaughter capacity in recent weeks. Ontario’s former Ryding-Regency plant, which closed in 2019 when the Canadian Food Inspection Agency revoked its licence, has reopened as TruHarvest Meats. It is considered a mid-sized plant.
As well, Atlantic Beef Products in Prince Edward Island is considering a small expansion, Laycraft said, and Harmony Beef in Balzac, Alta., is also seeking ways to marginally increase capacity.
Giving COVID-19 vaccination priority to meat plant workers was another item on the list of recommendations. Illnesses among beef processing plant workers last year resulted in major slaughter backlogs that took months to clear.
The Canadian Meat Council has asked governments to give higher priority to meat plant workers. In Ontario, meat plant workers have been designated to receive vaccine in phase two of immunization plans.
“We are urging all provinces to follow the lead of the Ontario government and recognize agri-food and the importance of our meat processors to the supply chain, and the need for our workforce to get vaccinated,” said CMC president Chris White.
“Despite industry’s best efforts, and millions invested to protect our workforce, the vaccine remains the most critical tool to protect this essential workforce.”
Interprovincial meat trade restrictions are another oft-cited barrier that discourages potential new processing businesses.
However, regulatory meat safety oversight varies by province so eliminating those barriers is a potential food safety risk. It also has implications for international meat trade that requires federal registration and inspection of processing plants that export product.
