Meat producers prioritize Canadian market amid COVID-19 outbreak in Alberta plants

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Slaughterhouses operating in Canada will prioritize feeding the domestic market over exports in order to protect the country’s food supply after the novel coronavirus forced processing facilities in Alberta to significantly cut beef production, according to the federal government.

Almost 500 employees at two of the country’s largest meat-processing plants have tested positive for COVID-19 in Alberta, representing roughly 15 per cent of the province’s infections. Cargill Ltd., which produces more than a third of all the beef processed in Canada, has suspended operations at its plant in High River. JBS Canada, another major operator, is down to one shift at its facility in Brooks.

The federal government, as well as retailers such as grocery stores, on Tuesday tried to assure Canadians that the domestic beef supply chain is secure. However, it is unclear how long the processing outages will last and whether similar facilities will be forced to follow suit. A handful of food-processing plants in the United States have also shuttered in order to prevent the spread of the novel coronavirus that causes COVID-19 or because too many employees have fallen ill, rendering plants inoperable.

Cargill to close meat-packing plant at centre of Alberta outbreak

Prime Minister Justin Trudeau said the industry will focus on supplying the domestic market.

“We have heard from Canadian beef producers and associations that the priority will be ensuring Canadian supply before they move to exporting,” he said. “So we are not at this point anticipating shortages of beef, but prices might go up."

Cameron Bruett, the head of corporate affairs for JBS, confirmed meat processed at the company’s facility in Brooks would remain in Canada. Cargill did not provide a response by publication time when asked whether it will do the same.

Canada typically exports approximately half of the beef it produces, according to the Canadian Meat Council, which represents 55 federally inspected meat packers and processors. Product normally destined for export, then, could be used to supply the market at home. “This is a short-term solution because export customers are also important,” Marie-France MacKinnon, the council’s vice-president of public affairs, said in an e-mail.

She noted that Canada already imports beef from the United States when necessary, so that is another temporary lever that retailers could pull if necessary.

Grocery stores and restaurants believe that, despite the major blow to Canada’s beef-processing industry, they will be able to meet demand by drawing on beef already in the supply chain and by finding alternative suppliers.

“It’s not going to impact our ability to supply beef to our stores,” said Jacquelin Weatherbee, a spokesperson for Empire Co. Ltd., which controls supermarkets such as Sobeys, Safeway and FreshCo. “We will shift to American supply.”

The company typically has about three weeks of supply on hand, she said. This means that if Empire is forced to import beef from the United States to meet demand, customers in Western Canada will not immediately notice the shift.

Metro Inc., a food retailer in Ontario and Quebec, echoed Empire’s confidence. “There will be no impact on our customers as we have several suppliers and have been able to make arrangements to increase our volumes with them,” said Marie-Claude Bacon, a spokeswoman for Metro.

Randy White, president of major food distribution company Sysco Canada, a standalone subsidiary of Sysco Corp., said in an interview this week that while he is “worried about the Canadian meat supply,” the question lies less in the available volume of beef than in the food system’s ability to move it where it needs to go.

“When they have a pandemic issue at a plant and they need to put it on pause for a couple days, it has enormous disruption for the industry,” Mr. White said. “But I will say this: There is no shortage of food. There’s more than enough food in our supply chain. It’s really how the supply chain is reacting.”

Meanwhile, the Canadian branch of fast-food giant McDonald’s Corp. brushed off supply concerns. Cargill’s facility in High River is one of several suppliers of ground beef for McDonald’s Canada, although it does not produce the restaurant’s beef patties.

“We are confident in our supply chain’s ability to meet our current demand for beef to ensure our restaurants are not impacted,” a McDonald’s Canada spokeswoman said in a statement.

Alberta on Tuesday said 401 people who work at the Cargill facility have been infected with COVID-19, and 77 more have fallen ill at JBS’s operations. Devin Dreeshen, Alberta’s Minister of Agriculture and Forestry, said Cargill’s operation is not to blame for the outbreak there.

“The High River cases are connected to a unique community spread and are not related to working conditions in the plant,” he said in a statement.

Mr. Dreeshen was not available for an interview and his spokesman declined to elaborate. Instead, the spokesman pointed to comments from Deena Hinshaw, the province’s Chief Medical Officer of Health. Dr. Hinshaw previously noted carpooling and crowded living conditions for workers contributed to the spread, but she also said it is possible the coronavirus moved through employees at the plant prior to Cargill putting in protective measures.

Paul Meinema, the national president of the United Food and Commercial Workers Canada, rejected the minister's assessment about the relationship between the coronavirus and Cargill's working conditions.

“I would agree that it’s a small community and there is carpooling and that sort of thing, but there is the common denominator of the plant, as well as the common denominator of the community," he said. "Every point of contact is a risk.”

With a report from Kristy Kirkup in Ottawa

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