The temporary closure of the XL Foods plant in Moose Jaw, Sask., has many producers and cattle feeders wondering about whether the plant will ever reopen.
XL Foods announced the closure of its slaughter plant last week with plans to reopen at the end of September.
“The biggest concern is there’s no assurance once it closes whether it will ever re-open,” said Canadian Cattlemen’s Association president Brad Wildeman. “That’s what we’re concerned about. At the end of the day if there’s nothing to slaughter, you can’t expect to keep it open.”
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The closure affects 200 jobs. The plant is the only major beef slaughter facility in the province.
Ed Bothner, president of the Saskatchewan Stock Growers Association, said although he wasn’t happy about it, he understood the company’s decision.
“I have a hard time beating up on Nilssons,” he said, referring to the owners of XL. “It’s out of their control. It’s a short-term thing, we’re hoping.”
Bothner said the SSGA has estimated cow numbers are down in Saskatchewan by at least 20 percent. That’s a much greater decline than other estimates.
“Some people don’t believe that,” he said. “I do.”
In its April 24 news release announcing the closure, XL said cull and fed cattle supplies have dropped to a level that doesn’t allow it to operate the Moose Jaw plant effectively.
The company said it hopes cattle numbers will rebound in the next few months and allow the plant to resume operating.
“We regret that we have had to take such extreme action but look forward to recalling the staff and recommending operations on or before Sept. 28, 2009,” said chief executive officer Brian Nilsson.
The company declined further comment.
The president of the Saskatchewan Cattle Feeders Association said it’s never good to lose a buyer. David Stuart also noted the cow selloff has been “going hard.”
“Our cow numbers do have to build back up,” he said.
Producers just getting over drought 10 years ago were then hit by BSE and they can’t take the pressure any more, he said.
“From the feedlot side of things, we’ll be shipping to a farther market.”
That will affect the competitiveness of Saskatchewan feedlots.
Manitoba producers will also be affected, as Moose Jaw was the closest Canadian slaughter facility for many of them.
Rob Leslie, senior analyst at Canfax, said the closure will lower prices for both fed and non-fed cattle.
“We’re reducing capacity and the plants don’t have to go out there and be quite as aggressive on their bids to procure cattle,” he said.
Meanwhile, Norm Neault, president of United Food and Commercial Workers Local 1400, said employees were shocked to receive layoff notices. Although they had experienced work slow-downs over the past 16 weeks, “they certainly didn’t see (closure) coming quite so directly,” he said.
The workers received pay in lieu of notice but have immediately lost their benefits. Their collective agreement expired at the end of January.
- eault lamented the loss of a once strong slaughter and processing industry in the province.
“Who would think in Saskatchewan we’d have no cows?” he said.
