A high American dollar and strong competition from other processors has forced an Alberta company to scale back its lamb business.
Canada West Foods of Innisfail has stopped selling individual lamb cuts, forcing 37 people out of work at the central Alberta plant.
The lamb business works differently than most agricultural businesses, said Canada West president Gary Haley. He said his plant must pay American prices for lamb and then sell the finished products at Canadian prices. He estimates Canada West’s costs of buying slaughter lambs has increased 75 percent during the past five years.
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“As the dollar drops it just gets worse.”
As well, United States’ lamb and sheep inventories have dropped to 7.6 million today from 11.4 million head in 1991, and is continuing to decline. Meanwhile, demand from American processors has remained steady creating tough competition for product.
“There are very aggressive buyers in the U.S. Either we pay the price or we don’t get the lamb,” said Haley.
While American buyers do not generally buy from each small prairie farm, the American price is reflected at the auction markets, he said.
Most large grocery stores buy lamb in individually packaged cuts from Australian or New Zealand.
The Innisfail plant will continue to slaughter and sell whole lamb and boxed lamb for the high quality market, but the plant will reduce its slaughter from 1,200 lambs per week to about 600, and buy only 110 pound lean lambs.
At the same time, the company will continue to supply its veal markets and plans to expand its export pork processing markets.
