Updated, April 15 — Ontario’s cattle producer organization is asking members to consider delaying sales of cull cows until market conditions “normalize.”
Beef Farmers of Ontario’s board on Thursday published a memo to beef and dairy cattle producers, asking them to help “prevent a further surge in cull cows in the market” — especially of animals in poor health or condition.
“We saw a significant and very concerning surge of cull cows enter the market over the last two weeks — particularly on the dairy side. It’s putting a ton of pressure on an already stressed area,” BFO executive director Richard Horne said in an interview with Farmtario.
Processing backlogs have “plagued” Eastern Canada’s beef sector for months, BFO said, due to insufficient processing capacity and plant closures.
Ontario has just three federally inspected beef plants, including Cargill’s facility at Guelph, Toronto-based St. Helens Meat Packers and Apple Meadows Premium Beef at Mount Forest.
Another Toronto packer, Ryding-Regency, handled up to 15 per cent of the province’s beef processing until it lost its federal licenses in December.
“The beef sector was already facing a shortage (of processing plants) before the Ryding-Regency shutdown,” Horne said. “We have seen a wave of additional loss of capacity, both pre-COVID-19 and after.”
Added pressure on Eastern Canada’s processors comes from recent temporary shutdowns at beef plants in the U.S. due to outbreaks of COVID-19, BFO said Thursday.
Those shutdowns include JBS beef plants in Colorado and Pennsylvania, National Beef’s plant in Iowa and, reportedly, the Aurora Packing plant at Aurora, Illinois.
“Once JBS in Souderton, Pennsylvania, resumes operations, it will provide an outlet to Ontario and Quebec,” Horne said. “We are expecting it to happen next week, provided there are no other disruptions.”
Also, Cargill’s other Canadian slaughter plant, at High River, Alta., announced Monday it would idle its second shift effective immediately.
“Supply surges, like the one we are seeing right now, put pressure on all segments of the industry, and threaten the health and welfare of animals,” BFO said.
Furthermore, BFO has advised producers to consult with their transporter and the auction centre the day before shipping. Auction and sale protocols are in a fluid state and subject to change depending on the auction market.
In a separate letter April 8 to federal Agriculture Minister Marie-Claude Bibeau, the heads of BFO and four other cattle producer groups in Eastern Canada said COVID-19-related shutdowns in the beef, pork and poultry sectors “give serious pause for concern about the impact of a potential disruption at the Cargill Guelph plant, where three of every four head of cattle in Eastern Canada are processed.”
Recent curbs in milk production “have further exacerbated the current backlog” in beef processing by creating an influx of cull cows, the beef groups added.
BFO last week reported 3,213 cull cows sold through auction markets, up by 932 on the week. Of those 3,213 head, 91 per cent were dairy breeds.
On average, BFO said, cull cow prices last week were at $57.02 per hundredweight, down 14.6 per cent on the week. Beef cow prices on average were at $62.54/cwt last week, while dairy breeds averaged $54.46.
In its market report for the week ending April 8, BFO said processing volumes for the week ending April 4 were up around 1,300 head from the previous week.
“Packers are working hard to process the cattle, but also must take precautions to ensure safety and health of their employees in order to keep the plants operational,” the organization said.
In their April 8 letter to Bibeau, the five eastern cattle producer groups called for direct financial support, either through existing business risk management programs, ad-hoc programs or both, to help beef operations in the region against mounting financial losses.
They also called for new “set-aside” programs for feeder/fed cattle and cull cattle, similar to those offered during the BSE crisis. Such programs are meant to help stabilize markets by compensating producers to maintain cattle for agreed-upon periods of time, keeping the animals out of the beef supply chain.
— With files from Jennifer Glenney of Farmtario.