The good times are rolling in the Alberta economy, and it’s putting many producers through hell.
Hog barns can’t find workers. Auction marts can’t find workers. Cattle slaughter plants are having trouble finding workers.
In July, the much anticipated and celebrated second shift at Olymel’s Red Deer hog slaughter plant was cancelled due to a worker shortage.
“It’s a problem that nobody anticipated and it’s come up to bite us really bad,” said Mack Rennie, the general manager of the Western Hog Exchange, whose job is to find slaughter space for a large part of the Alberta pig herd.
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“I don’t know what the answer is.”
The booming oil price has led to a mania of construction and development in the oil patch, especially in the Fort McMurray oilsands region.
A number of oilsands projects have stumbled as they seek the skilled labour they need, but they have also been drawing semi-skilled workers, such as truck drivers and basic construction workers, as have the gas drilling companies.
That puts the energy industry in direct competition with agriculture, and unlike the former, which can afford to jack up wages, agriculture continues to be a low-margin business with no easy way to swallow the cost of increased wages.
“After all the fixed costs are covered, there’s only so much left,” said Rob McNabb, the general manager of operations for the Canadian Cattlemen’s Association.
“It’s a sign of prosperity, but it doesn’t come without challenges.”
Auction mart operators are getting worried about finding cattle-handling staff for the upcoming fall run. With the oil patch throwing money at rural workers, and even Tim Horton’s offering up to $15 per hour in parts of the province, it will be hard to find seasonal workers at wages the cattle industry can afford.
McNabb said feedlot operators need good, trained staff, but many of those people have been lured away by higher wages in the oil patch.
“It’s not easy (competing with oil patch wages). It’s not possible. But that’s what you’re up against,” said McNabb.
Abandoning the second shift at Olymel, which was leading the plant toward a 90,000-head-per-week capacity, is a tragedy for hog producers, Rennie said.
Now production, even with overtime, has slumped down to about 50,000 head per week, after reaching 60,000 in the early ramp-up of the second shift.
That leaves Rennie scrambling to find shackle space for tens of thousands of hogs that would have gone to Red Deer.
“Some of the smaller plants are having problems too,” he said.
Solutions aren’t going to be easy. Importing cheap foreign labour is a common idea, but not so easy to do effectively.
“It’s easy to say we’re going to bring in 500 Mexicans, or 500 Salvadorans or 500 Chileans,” said Rennie.
“But you don’t just step off the plane and into a plant or a farm. It takes six months to a year before you have value, and then you have to go back.”
The surge in the oil patch has helped many farmers who are able to earn off-farm wages. Rennie’s son is working in the oilsands as a journeyman electrician, making good money.
What’s he doing with it?
“Buying a farm,” said Rennie. “I said: ‘Are you nuts?'”
