When the Harmony Beef plant closed for three days in late March, it was a warning of bigger problems ahead. After a couple weeks of beef slaughter plant slow-downs or closures in North America — including in Alberta, at Cargill in High River and JBS at Brooks — producers are very concerned on how the industry will deal with compounding inventory issues.
The Canadian Cattlemen’s Association is pushing hard for the federal government to fund something similar to the past BSE-era set-aside program to encourage producers to hold cattle back when processing capacity isn’t available. The plan is not perfect, but it’s the best the industry has at this point.
As the two major packing plants in Alberta try to keep workers safe and maintain slaughter levels, the industry recognizes the potential for a backing up of fat cattle creating a massive inventory problem. With major U.S. plants — JBS at Greeley, Tyson at Pasco, and Cargill at Fort Morgan — experiencing the same challenges on capacity, many cattle across the west side of the continent are now in danger of not being slaughtered on time. This inventory issue is compounding quickly, and it requires a response.
Many producers I have spoke with are not that excited about a set-aside program, which I think is somewhat based on whether you have cattle contracted or how soon you believe Canada will get past COVID-19 outbreaks. My opinion is that producers with contracts have a false sense of security that their cattle will be slaughtered on time. One critical element of those contracts is that the plant is actually operating to handle the contracts in question. As for the second factor, no one really knows the length of time Canada will need to actually get past the virus. The timeline is unknown.
Several producers have provided feedback saying it was “too early” to call for a set-aside, but there is an urgency to be proactive. The trend at packing plants is getting worse as each week passes, not better.
Pushing cattle back by feeding them a maintenance ration will provide some measure of relief on the daily slaughter requirements while the plants and the unions deal with keeping employees safe.
Is set-aside ideal? The answer is no, but at this point this is the best option that the industry has when there is no clear plan B or C, and no one wants to end up in a depopulation situation.