Processing capacity continues to weigh on Ontario beef industry
Rob Gowa, The Kincardine News (Canada)
Jan 11, 2021
While the beef industry in Grey-Bruce weathered 2020 and the challenges that came with the COVID-19 pandemic, work continues to address concerns around packing capacity in the province.
Rob Lipsett, president of Beef Farmers of Ontario, participated in Beef Day at Grey Bruce Farmers’ Week on Wednesday, where he said finding solutions to address the lack of processing capacity continues to be top priority for the industry in the province.
“We are working on short-term, medium-term and long-term solutions to the processing capacity,” said Lipsett, who runs cow-calf and backgrounder operations near Annan. “Most of them are involving both the federal and provincial government and some kind of funding to spearhead expansion.”
In the spring, processing plant closures and slowdowns due to COVID-19 outbreaks, delays in getting cattle to market in the U.S. due to a tightening border and lower restaurant demand because of shutdowns, resulted in a backlog of cattle ready for market and depressed prices for producers. But those were short-lived, Lipsett explained.
“I would suggest that early in the pandemic we fared really well,” Lipsett said. “The processors that continued to operate were working through at about 122 per cent of capacity.”
But Ontario producers are again seeing lower prices for their cattle with the shutdown of a Guelph processing plant because of a COVID-19 outbreak last month.
“We didn’t suffer too much until December when Cargill (in Guelph) had to close and Norwich Packers also had to close for a little while due to COVID,” he said.
But that lack of processing capacity was impacting beef farmers even before the pandemic hit, after a major Ontario plant closed in the fall of 2019, Lipsett explained. Other factors that have weighed heavily on the industry include U.S. plants taking fewer Canadian cattle, an overabundance of cow culls in the Ontario market and plant closings in Quebec in recent years.
Lipsett said BFO continues to lobby governments, and both the federal and provincial governments have been open to talks about more programming and ways to increase processing capacity as well as supports for the sector.
He said the beef industry had an obvious win last year with an additional $50-million invested into a risk management program for farmers as well as changes to the fund that manages allocations on a sector-specific basis.
The Canadian and Ontario governments have also invested funds into a set-aside program, allowing beef farmers to apply for funding to cover the increased costs with setting aside and feeding market-ready cattle during process delays brought on by the pandemic.
The program was activated for Ontario producers in late December following the shutdown of the Guelph plant.
Lipsett said BFO was really pleased when that funding was made available.
And funds were also earmarked for improvements at Ontario meat processors and abattoirs...