Monday, March 1, 2021

Beef slaughter capacity tight

The Canadian Cattlemen’s Association (CCA) told a Parliamentary committee looking into the beef industry that slaughter capacity is tight.

It also said small and medium-sized packers have trouble competing with the efficiencies of the largest packers. They also have more difficulty meeting regulatory standards.

Eastern Canada was tight on slaughter capacity even before the COVID-19 pandemic, the CCA said, with utilization at 90 per cent since 2017.

Last year packing plants were at full capacity of 12,550 cattle per week..  The year before, a 13,250 capacity was used 98 percent.

“This resulted in longer feeding periods, increased costs and lower prices for producers,” the CCA said.

“This capacity shortage has been particularly acute during the fall and winter months where producers are experiencing delivery and processing delays and a negative price spread to other regions,” CCA said.

Closure at Cargill’s Guelph facility in December because of COVID-19 resulted in an estimated backlog of 10,000-15,000 head of cattle during the two-week period.

The set-aside program put in place by the federal government during the pandemic helped bring “stability to the market” but a backlog of 10,000 to 15,000 head of cattle remains, according to the CCA.

Across Canada in 2020, Canadian federally inspected slaughter capacity averaged 57,681 head per week with a utilization rate of 89 percent.