A report from a council tasked with building Manitoba’s cattle slaughter capacity sees serious risk in flowing federal support to the “already overdeveloped” beef sectors in Alberta and Ontario.
Following federal Finance Minister Jim Flaherty’s budget in late January, the Manitoba Cattle Enhancement Council (MCEC) recently released a report on the “Manitoba pillar” in Canada’s federally inspected beef packing industry.
Flaherty’s budget pledged $50 million in federal matching funds for private sector investments in “sound business plans” to cut costs, boost revenues or improve operations at packing and processing facilities.
Critics at that time criticized the proposal as doing nothing to ensure the funds don’t just flow to major meat packers such as Cargill, XL Foods or Tyson.
The MCEC report says that larger packing plants aren’t built to fill the demand of “important growth markets” in the developed world, such as organic meats, “functional foods” or kosher and halal products.
The report also questions the sustainability of long-range shipping of live cattle to the major packing plants or to the U. S., describing such hauls as “environmentally unsound” and creating “unnecessary risks of biohazards.”
Moreover, the council said, Canada’s beef industry now sits “at odds with current and forecasted industry trends,” focusing on lowest-cost beef for the slow-growing North American market rather than the growth markets in Asia and developing countries.
Encourage more players
Federal policy should encourage more players in the beef packing sector in areas that now have “few options,” the MCEC report said.
“This may seem counter-intuitive given the current reported overcapacity of packing plants in Alberta,” the council said, but the alternative would be to “officially give up on regional beef production entirely” and hand the beef industry’s fate over to Cargill and XL (which last year made a deal to buy Tyson’s Lakeside plant at Brooks, Alta.).
“That would make Canada’s beef industry nothing more than a feeder for the giant U. S. industry. And it’s worth noting that with recent U. S. country-of-origin labelling (COOL) legislation, we are not expecting trade barriers to become simpler in the future with respect to shipping live animals.”
Flowing federal cash only to Alberta and Ontario “will only exacerbate the industry’s current malaise,” rather than respond to market pressures through a “smart, nimble regional infrastructure consisting of smaller plants.”
Local ownership and management of regional plants with federally inspected slaughter capacity “encourages knowledge of disease and other risk factors, builds industry infrastructure and improves both producers’ and packers’ financial feasibility,” the council wrote.
Such a focus would also help the industry steer clear of potential trade barriers or “outright border closures,” MCEC said.
MCEC, formed by the Manitoba government in 2006, administers a beef slaughter and processing investment pool, funded by Manitoba cattle producers through a $2-per-head levy on every animal sold. The province will match producers’ contributions for the first three years.