A $17 million contribution from the Alberta Government Thursday is seen as the first step of creating a set-aside program for Western Canadian beef producers forced to hold back finished and feeder cattle due to the slow downs in beef processing capacity.
The $17 million is the 40 per cent component of a $40 million federal/provincial
40/60 per cent cost-shared program announced by Alberta Premier Jason Kenney. Alberta is putting in $17 million while the federal government is putting in $26 million for a set-aside program for Alberta beef producers.
Apparently talks are underway as other Saskatchewan and Manitoba plan to provide funds for their respective cost-shared set-aside programs. Alberta has offered to administer or manage the set-aside programs for all western provinces.
The set-aside program will help beef producers off-set the feed and lost income costs of holding finished cattle back due to a slow down in processing capacity at packing plants. As of Friday May 8 it is estimated Alberta cattle feeders have about 130,000 head of finished cattle on hold.
In Alberta, Cargill Ltd. at High River, JBS Foods at Brooks, and Harmony Beef at Balzac which handle about 80 per cent of Canadian beef processing capacity have all had processing slow downs or stoppages due to the COVID-19 pandemic. And there have been similar slow downs or interruptions in processing capacity at other Canadian and U.S. processing facilities.
All these interruptions have reduced processing capacity by as much as 40 per cent — for a couple weeks, for example, as many as 6,000 head of market ready cattle per day were adding to the backlog.
Dennis Laycraft, executive vice president with the Canadian Cattleman’s Association says as all processing plants deal with employee health and safety measures inside their facilities, processing capacity will steadily increase. He says plant operators have taken “extraordinary” measures with upgrades to ensure worker health and safety is protected as much as possible.
As plant workers return to their work stations, and processing capacity ramps up, Laycraft estimates Cargill, JBS and Harmony have potential to process up to 10,000 head per day. It will take months for the processors to work through the backlog of cattle in the system, which will impact or ripple through the whole production chain from feeder, to yearling and backgrounding operations, to cow-calf producers.
Funds for the set-aside program provides important assistance to beef producers, but industry officials say they are still urging for government assistance with other programs.
“While we were hoping for more support from the federal level, we are very pleased to see Alberta mobilize the maximum amount of funding at the provincial level, and commend them for responding so quickly,” says Greg Schmidt, Chair of the Alberta Cattle Feeders’ Association (ACFA). “We are committed to working closely with the Government of Alberta to encourage our federal government to increase funding and resources for the sector in order to keep our food supply secure and accessible for all Canadians.”
- Eliminate the $3 million payment cap;
- Increase the trigger from 70 to 85 per cent for 2019-20 and remainder of the CAP Partnership Agreement;
- Invoke the “late participation clause” to help producers access needed support;
- Remove “reference margin limiting” for meaningful and longer-term support; and
- Process claims more quickly and allow for interim payments.
EVERY BIT HELPS – DIRECT SALES
The Saskatchewan Stock Growers Association is hoping to take some of the pressure of what to do with finished cattle as it sets up a directory of producers interested in offering direct sales of beef to consumers.
With COVID-19 outbreaks disrupting processing in Canada and the USA, consumers are keeping a watchful eye on the meat case of their local supermarket, says an SSGA release.
“We know there’s absolutely no shortage of beef cattle,” says Bill Huber, SSGA president. “But there is a downturn in processing capacity which could have an effect on retail prices and availability.”
Many producers sell beef directly from their farms, but consumers might not know how to find them. The SSGA directory will make it easy to connect buyers to sellers – it’s a win for everybody, Huber said.
“The loss of packing capacity creates uncertainty for producers with cattle to sell. When consumers buy their beef from the farm gate, they’re getting great value while helping out their local farmers and ranchers.”
“People like to know where their food comes from,” he said, and this is a great opportunity for consumers to meet the people who produce the top-quality beef Saskatchewan is famous for.”
Producers can register online through the SSGA. There is no cost for SSGA members. “Initiatives and opportunities like this are part of the benefits of joining,” Huber said.
Consumers can find the directory at skstockgrowers.com and SSGA’s social media channels.
Lee Hart is editor of Cattleman’s Corner based in Calgary. Contact him at 403-592-1964 or by email at [email protected]