Both beef and pork producers in Manitoba are having supply chain issues during the ongoing COVID-19 pandemic, industry representatives told the Sun on Tuesday.
Work at a large pork processing plant in South Dakota owned by Smithfields was recently suspended after employees were diagnosed with the coronavirus.
Approximately 37 kilometres south of Calgary in High River, Alta., a Cargill meatpacking plant has also been temporarily closed after an outbreak of COVID-19. Both closures are affecting producers in Manitoba.
Manitoba Pork Council general manager Andrew Dickson told the Sun that the going rate for pigs has dropped recently because of a couple of factors, including the closure of the plant in South Dakota.
Because so many businesses in the food service industry are closed, the demand for pork has recently decreased. Coupled with that is the closure of the Smithfields plant, which has led to a reduction in the number of pigs able to be processed in North America.
According to him, the industry doesn’t have much capacity to put meat in cold storage because the quality of the product degrades too quickly.
"The effect we see right away from these plant closures is the effect it has on market prices," Dickson said. "All our formulas that are used to pay our producers ... are based on the United States daily average price published by (the) USDA. It’s a summary or average of all the prices paid across the United States. When you get a local market affected in say, Sioux City … that’ll have an impact on the national price, which will in turn affect our producers."
He added that a common tactic to reduce production at plants is to lower prices to discourage producers from selling their pigs. Normally, the South Dakota plant processes 20,000 pigs a day by itself, which Dickson said is equivalent to all the pigs processed in Manitoba.
On the bright side, he said that there are eight plants in the United States bigger than the Smithfields one and they’re all still currently operational. Dickson is hopeful that the industry in the U.S. will be able to cope if workers at the other plants start getting sick.
"We’re entering into uncharted waters is the best way of putting it," he said.
If restaurants start reopening by June in the U.S., Dickson said that the industry could see an economic recovery by the summer. Fortunately, he said, the industry in Canada has never been as reliant on the internal food service industry because so much of our product is shipped abroad. If ports start closing due to the pandemic, that could pose a real threat to the industry.
Manitoba Beef Producers general manager Carson Callum said that the suspension of work at the Cargill plant poses a "short-term challenge" to the industry.
"It does decrease the processing capacity in Western Canada by a substantial amount," Callum said. "If this were to carry on for a long period of time, it could have some impacts on producers’ ability within the province to be able to market their animals effectively."
He said that the producers most likely to be impacted by this are those who normally hold on to animals to sell at this time of year like feeder cattle. Callum said that the price for beef is currently volatile and producers are taking a hit.
According to Callum, there haven’t been major interruptions at any other beef processing plants in Canada. Some plants have seen marginally reduced capacity due to preventive measures put in place, but Callum said his organization is in favour of efforts made to keep workers safe.
Both Dickson and Callum said that credit being offered to farmers is largely helpful, but not all producers will be able to take on that kind of debt. Callum added that he’d like to see a natural disaster be declared so that aid can be distributed to producers under the AgriRecovery framework.
Dickson said producers are very grateful for workers at plants like the Maple Leaf plant in Brandon for continuing to come to work and putting in effort during the pandemic.
» Twitter: @ColinSlark