“While we understand the federal government is seized with a housing shortage, temporary foreign workers are not the problem, representing only nine per cent of the temporary resident population,” the groups said in a statement today.

In March, the federal government announced that, effective May 1, some sectors would be allowed no more than 20 per cent of their workforces to be made up of temporary foreign workers (TWFs) brought in via the low wage stream—down from the 30 per cent limit introduced via the Workforce Solution Roadmap in 2022.

The sectors affected were wood product manufacturing, furniture manufacturing, accommodation and food service, and food manufacturing—defined as industries involved in turning agricultural products into ingredients or food items, whether for wholesale or retail, according to the North American Industry Classification System. Construction and healthcare were exempted.

The validity limit of labour market impact assessments (LMIAs) were also reduced. A LMIA is a document employers must obtain before hiring foreign workers. It assesses the impact of hiring foreign workers on the domestic job market and ensures that the employer and job offer are legitimate. In 2022, the maximum validity of LMIAs were extended to 18 months from nine.

The federal government cited reduced job vacancies and a need to reduce Canada’s reliance on foreign workers.

The organizations said the changes are already having an impact on productivity.

“Now with a reduction in the amount of time this assessment is valid as well as the length of time assessors take to review applications, there is concern that the industry will not be able to bring in needed foreign workers,” said Will Lowe, chair of the National Cattle Feeders’ Association.

“If there’s a shortage of workers in the processing sector, it runs the risk that producers can’t ship their product to market, causing uncertainty for producers and consumers alike,” said Rene Roy, chair of the Canadian Pork Council. “We need to help recruit more new Canadians to rural areas, and creating uncertainty defeats our efforts to convince people to come join our industry.”

Meat processors have struggled for years to fill jobs and have come to rely on foreign workers and immigration to maintain their workforces.

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Financial statements of the meat-processing companies — which control 55 to 85 per cent of the market for beef, poultry and pork — contradict claims that rising meat prices were caused by higher labour or transportation costs, advisers led by National Economic Council director Brian Deese wrote in an analysis published on the White House website Friday.

Officials studied earnings statements from Tyson Foods, the chicken producer and biggest U.S. meat company by sales; Brazil-based JBS, the world’s biggest meatpacker; Brazilian beef producer Marfrig Global Foods, which owns most of National Beef Packing Co.; and Seaboard Corp.

Those statements showed a 120 per cent collective jump in their gross profits since the pandemic and a 500 per cent increase in net income, the analysis shows. These companies recently announced $1 billion in new dividends and stock buybacks, on top of the more than $3 billion they paid to shareholders since the pandemic began (all figures US$).

Trade group the North American Meat Institute accused the White House of “cherry-picking” data.

“It is no coincidence this blog post appears on the same day as the Consumer Price Index is released showing gas and energy prices are up nearly 60 per cent over the past 12 months which is nearly 10 times the rate of inflation for food,” president Julie Anna Potts said in a statement.

Profit margins — the spread companies are making over and above their costs — have increased significantly too, belying the argument that companies are just passing along higher labour and supply costs, the analysis said, with gross margins up 50 per cent and net margins up over 300 per cent.

“If rising input costs were driving rising meat prices, those profit margins would be roughly flat, because higher prices would be offset by the higher costs,” the analysis said.

Increases in meat prices accounted for 25 per cent of the rise in consumer prices for food consumed at home in November, a big driver in the surge in inflation seen in recent months.

Tyson increased the price of beef “so much — by more than 35 per cent — that they made record profits while actually selling less beef than before,” the advisers wrote.

The companies didn’t immediately respond to requests for comment.

The White House, hammered by Republicans over rising inflation, is scrambling to combat rising prices by clearing supply chain logjams and tackling what it views as uncompetitive practices by big companies, which are reporting big profit gains even as consumers suffer.

Friday’s blog — released after November consumer prices showed the largest annual gain since 1982 — reflects growing frustration by White House officials about continued increases in meat prices, an issue it flagged in September.

— Andrea Shalal reports on U.S. trade and economic policy for Reuters from Washington, D.C.

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Alberta’s two big facilities — Cargill’s High River plant and JBS’s Brooks plant — process nearly 75 per cent of the country’s beef. Combined, hundreds of their workers have contracted COVID-19. Cargill’s plant closed down temporarily on April 20 while, at press time, calls were mounting, particularly in Brooks, for the JBS plant to close so it can undergo a deep cleaning.

The impact on cattle producers from the temporary closure of the High River plant and Brooks moving to one shift was immediate.

“The feedlot industry is getting hit now, and every day there is more buildup,” CCA president Bob Lowe said April 27. “It just gets harder and harder. Fat cattle dropped over $500 a head and that’s even if you can get them processed.

“If those cattle don’t leave, then feedlots can’t fill those pens because they’re already full. That affects the feeder market — the 800- to 900-pound cattle that should be going on feed. They’re just sitting there idling right now.

“If that goes on long enough, that will affect the calf market next fall, because there’s no place to put anything.”

But once a plant is cleaned — a process expected to take two weeks — the facility should be able to not only resume processing cattle but continue to do so, he said.

“It would be virtually impossible for COVID-19 to exist in those plants — in my opinion, they’re more sterile than a hospital,” said Lowe. “As far as picking up the bug in the plant, that’s got to be impossible. They’ve spent a ton of money making those plants completely safe, but they can’t control what happens outside of the plant.”

Reopening a facility shouldn’t be a major problem, said Sylvain Charlebois, a professor and director of Agri-Food Analytics Lab at Dalhousie University.

“Plants in the East were closed and reopened — I don’t see how it would be different in High River,” said Charlebois, one of the country’s top experts on food production.

But staffing the facilities is more challenging.

“Meat-packing has always had a problem finding a workforce, COVID or not,” he said. “That’s the reality of the sector, and that’s why we have a lot of migrant workers involved with the sector.”

Many of those workers share homes and travel to work together, said American analyst Cassandra Fish, a 30-year industry veteran and a former senior risk manager with Tyson Foods.

“Everybody is exposed to more people,” she said. “They ride to work together in a car or truck. One person drives to save money. There might be four to five people, even six people in a vehicle.”

Charlebois said he is concerned about the ability of the companies to bring workers back — especially as their union has been sharply critical of both companies’ efforts to protect their employees.

“For a union to go out and register concerns with the public on a regular basis, it’s not a good sign,” said Charlebois.

In an open letter to Premier Jason Kenney, the president of the union local representing workers at both plants said, “we have lost faith in the willingness of the Alberta government to do everything necessary to protect workers.”

“Our members have become sick with COVID-19, and some have died,” Tom Hesse, president of the United Food Commercial Workers Canada local, wrote in the April 23 letter. “Recent events suggest that food production has been prioritized over protection of workers’ lives.”

But beef industry officials say that’s not the case and the two companies have taken a number of measures to protect workers. Cargill, for example, has put up Plexiglas dividers between work stations, handed out additional protective equipment such as face shields, and is looking at ways to get employees to work safely, said Dennis Laycraft, executive vice-president of the Canadian Cattlemen’s Association.

Aid will be needed

Every lost day of processing will add significantly to the backlog of cattle. At full production, the two plants can each process 4,000 or more head of cattle each day — so each day of lost production quickly adds up.

“You shut down one of these plants for a month, that’s a whole lot different than shutting it down for two weeks,” said Lowe, who operates Bear Trap Feeders near Nanton. “The longer things stay shut down, the more backup there is or the longer it takes to get caught up.”

The Canadian Cattlemen’s Association has asked Ottawa to immediately implement a set-aside program, which would cover the cost of a “maintenance diet” (of mostly forage instead of grain) for slaughter-ready cattle in the processing backlog.

But government assistance will be needed throughout the entire cattle sector, said Lowe.

“Feeders are taking the hit now (but) it will definitely go down the line to the cow-calf sector,” he said.

However, that will take time.

“The big calf market won’t come along until October,” said Lowe. “There’s a lot of time to have things pick back up.”

Still, with cattle prices dropping, government needs to have a support plan, either by enhancing the cattle price insurance program or via direct aid, he said.

Charlebois agrees.

“It’s time for Ottawa to think about an emergency fund for the livestock industry in particular to compensate ranchers and producers for their losses, and also a fund to support farmers and to make sure their operations comply with physical distancing measures that we’re seeing everywhere,” he said. “There are some provisions there, but it’s not enough.”

In a statement on April 24, the federal agriculture minister said her officials are working “around the clock” to respond to the pandemic’s impact on farmers and agri-food businesses.

“We understand the repercussions the short-term capacity reduction in certain meat-processing facilities is having on livestock producers,” Marie-Claude Bibeau said in the statement.

“In collaboration with our provincial partners, we are examining all options to protect workers, support our farmers and processors, and keep high-quality and affordable Canadian meat products available to Canadians… Farmers and food businesses are doing a huge service to feed the nation and they can be confident that their government has their back.”

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Under rules introduced by the previous Conservative administration, the number of low-skilled foreign workers a firm could employ would have dropped to 10 per cent on July 1 from 20 per cent currently.

Employment Minister MaryAnn Mihychuk said she was freezing the limit at 20 per cent for employers who had hired workers before June 20, 2014. Those accessing the system after that date are subject to a 10 per cent cap.

Mihychuk, who has vowed to revamp the system, told Reuters in April she might push back the July 1 start date, saying it was too ambitious.

Farmers and meat processors complained the 10 per cent limit would result in labour shortages while unions say the curbs are needed to prevent firms from filling jobs that could otherwise be taken by Canadians.

The Liberals loosened foreign-worker restrictions in March for seafood plants. Mihychuk said at the time she was not convinced other sectors needed the same help.

— Reporting for Reuters by David Ljunggren in Ottawa.

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“I wouldn’t want to run our business without BioLinks,” said Tim Hofer, manager of the Pine Haven Colony Meat shop.

The meat shop was a participant in the pilot project, and worked with Alberta Agriculture and Rural Development and a private software developer in the creation of the program. BioLinks uses a basic bar-code system to track every cut of meat from a carcass, which allows meat processors to simultaneously track sales and manage inventory while having full traceability.

There are similar systems out there, but they are larger, more expensive, and more difficult to run, said Hofer.

“This program would meet the needs of small or large processors,” he said. “It’s not that large processors would run out of capacity. It’s more suited to small processors because it is affordable to them.”

• More from the Alberta Farmer Express: Verified Beef Production program gives producers an edge

The system costs about $1,500 to set up, and that’s key, said provincial business development specialist Vince McConnell.

“A lot of the systems that the big boys like Cargill have, they’re $250,000 systems,” he said.

“Now we’ve made a system that can perform as well as their systems, but a small-scale guy can use it and get some information back.”

BioLinks became commercially available earlier this year and is now being used by small processors in several provinces. The meat shop at Olds College, the Viking Hutterite Colony, and Spragg Meat Shops are some of the Alberta companies using BioLinks, which is being distributed by BIO, a company from Guelph.

The team at Pine Haven worked closely with McConnell and his Alberta Agriculture and Rural Development colleague Bert Dening and Drevertech, a programmer out of Camrose, to perfect the system. Government funds paid for years of program development.

To run the system, an iPhone is slipped into a sleeve called a “sled,” which contains a bar-code reader. It also connects the iPhone to a web-based database for managing inventory and sales (the phone uses Bluetooth technology to connect to a printer to print receipts).

“The fact that it is web based and can be shared with a computer is a very important feature,” said Hofer.

The technology allowed him to hire an assistant who can take phone orders, handle inquiries, and generate data about inventory all from her home.

The program has cut down on a lot of paper waste.

“We can fill orders online, fill orders with a scanner and email an invoice to the customer requesting payment,” said Hofer. “The customer will then give us a call and pay over the phone using a credit card.”

Processors using the system are finding unique ways to manage some of their data. For example, QR codes on packaging allow customers to trace information right back to an animal.

• Second version of beef database BIXS 2.0 launched

“A person who is eating that steak can actually take his iPhone, scan the package, and it brings him to the producer’s website,” said McConnell. “If he doesn’t like that meat, he can comment on it, and it automatically drops into the database, where the animal and production information is stored.”

Some processors are making marketing decisions based on the information they have gleaned from the system, said McConnell. VG Meats, a meat processor from Ontario, has been taking pictures of rib-eyes and tracking meat tenderness. The owner has created a price grid which reflects the true value of the cuts.

“He’s actually rewarding the producers who have true tender steaks and also, he’s doing a discount for the extra fat,” said McConnell. “We’re really getting some solid data on how the actual animals performed. And because we can collect the actual invoices from the sales of these animals, we get the true story. We get the true bottom line.”

The technology has been designed so it can one day be linked to the Beef InfoXchange System (BIXS).

Transitioning from manual data entry to a scanning technology does take some time, but is worth the effort, said McConnell.

“The data collected gives us some real good information for key production indicators on the farm for retail and for processing plants,” he said.

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