Dwight Foster, owner of North Gower Grains, stands next to cattle on his feedlot on June 7 in North Gower, Ont.Dave Chan/The Globe and Mail
Dwight Foster has 8,000 head of cattle in a barn bigger than a football field. Each cow is getting fatter by the day. And that’s not a good thing.
Mr. Foster, a feedlot operator just outside Ottawa, purchases these cows from ranchers throughout Ontario and the United States. He feeds the cows for a few weeks on a fat-rich diet before sending them to the Cargill slaughterhouse in Guelph, Ont. Normally, Mr. Foster trucks several loads of cattle a week to the facility.
However, he and other producers have been unable to move their inventory and are getting nervous. The Guelph facility has been offline since May 27 when around 1,000 workers voted to strike after rejecting a contract. Neither party has come back to the table.
The Guelph Cargill facility, the largest in Eastern Canada, capable of handling 10,000 head of cattle a week, processes the vast majority of the beef in that part of the country.
Although feedlots can send their cattle to facilities in Alberta or the U.S., crossing provincial boundaries and national borders presents a wide array of bureaucratic, economic and logistical challenges and is not good for animal welfare. Other plants also operate close to full capacity, making it more difficult to take in thousands of extra head of cattle.
“When they’re not willing to take our cattle, it starts to pile up real fast,” said Mr. Foster, who added that he is losing approximately half a million per week, cash he needs to purchase feed for his livestock. “We feel like we’re at the mercy of people that are sitting around the table, and they’re not even negotiating.”
This disruption reflects a larger, systemic issue within the cattle supply chain.
The Canadian beef sector is strong, said Sylvain Charlebois, director of the agri-food analytics lab at Dalhousie University. There are currently 60,000 beef farms and feedlots, and the industry contributes $21.8-billion to gross domestic product. Canada exports $4.68-billion, with high-value markets in the U.S. and Japan. Yet the whole system needs to run smoothly, and that’s breaking down.
“The processing industry is a mess,” Mr. Charlebois said.
Cattle at North Gower Grains feedlot on June 7 in North Gower, Ont.Dave Chan/The Globe and Mail
Seventy per cent of Canada’s beef-production capacity is located in two meat plants, owned by two companies: Cargill and Brazilian giant JBS. According to Mr. Charlebois, beef-processing plants still function like they did in the 1950s, with little mechanization or automation. He wonders why a multinational with a 2023 annual revenue of US$177-billion has not invested in updating its facilities.
In response to these arguments, Cargill said that it had invested US$90-million into automation at its Canadian plants.
The strike in Guelph and labour unrest at the Cargill packing plant in Calgary highlights other vulnerabilities in the cattle supply chain. Few people want to work in the difficult and unsavoury environment of a slaughterhouse and many who do are immigrants and temporary workers.
On May 26, employees at the Guelph Cargill plant rejected a negotiated settlement that would have boosted wages by 9.3 per cent in the first year of a four-year agreement, plus retroactive pay dating back to Jan. 1. Over the following three years, workers would have received an extra 50 cents on their hourly wage. The total wage increase over the four-year period would have amounted to 16 per cent. The U.S. meatpacker also offered benefit enhancements and a signing bonus.
But workers want to see higher wages to offset inflation and higher living costs, said Sam Caetano, the regional director for the UFCW’s region six.
“It all comes down to wages and maintaining our lifestyle,” said Mr. Caetano, who added that working in a slaughterhouse is hot, fast-paced and heavy work.
Cargill is not offering another deal. In an e-mailed statement to The Globe and Mail, the company said it was disappointed in the strike and the disruption it has caused costumers.
Right now, producers are managing the strike, said Dennis Laycraft, executive vice-president of the Canadian Cattle Association.
The strike comes at a fortunate time of year for the industry. In spring and early summer, ranchers can keep their cattle on pastures for longer periods. This is relatively cheap and takes the pressure off feedlots. Feedlots can also slow the rate of fat growth by changing the diet of their cattle.
The strike in Guelph and labour unrest at the Cargill packing plant in Calgary highlights other vulnerabilities in the cattle supply chain.Dave Chan/The Globe and Mail
However, the clock is ticking. Cattle set for slaughter this year must be moved to a feedlot eventually, and the cows currently in the feedlots will soon reach an ideal weight. Should they surpass this level, the meat quality will be damaged and slaughterhouses will impose deductions on producers.
Some options do exist for moving the cattle to other plants. For example, Cargill is honouring formal contracts it has with some producers and arranging for them to truck cattle to other facilities such as High River in Alberta. Cargill is covering the costs of transportation. However, there is not necessarily space for those without a contract and hauling the cows long distances to Western Canada is expensive, approximately $20,000 a load.
In some cases, though, trucking to Alberta is not possible. Fred Van Osch runs one of the largest feedlots in Eastern Canada. He is licensed to import cattle from the United States. But U.S. cattle is not permitted to be put on pasture in Canada. This means he cannot transport the cows to High River. The journey takes 35 hours and cattle cannot be held in transport for that long. They need to be unloaded, watered and rested.
“We’re dealing with live animals,” Mr. Van Osch said. “It not like it’s grain and we can just shut the bin.”
Cattle ranchers across Canada have faced a series of challenging years. Droughts in 2022 doubled the price of hay while decimating pasture land. Beef prices have been low and forest fires have destroyed crops and pasture land. However, according to Mr. Laycraft, this year’s growing conditions appear to be the best in five years. Beef prices are also high. Barbecuing season has arrived and demand is stable.
“We’ve got a year where there’s real opportunity to start to see some recovery in our industry,” he said.
For Mr. Foster, these problems in the industry cannot persist. He, alongside other producers, feel powerless.
Regardless of what happens in Guelph, his cattle must be fed, watered and cared for. He is hemorrhaging cash and, until the plant comes back online, has nowhere to send his cattle and no income.
He wonders why this disruption is allowed to happen. Slaughterhouses were considered essential during the pandemic and he can’t understand why the government is not intervening now.
“I’m just a little cog in a big wheel whose at the mercy of these people.”