The job cuts are the latest blows to America’s heartland from the biggest U.S. meat company by sales. Tyson has also closed six U.S. chicken plants since the start of 2023 and an Iowa pork plant, laying off thousands of workers.

Tyson faces financial pressure as the nation’s cattle herd has dwindled to its smallest size in decades, raising costs for the animals the company processes into beef. The meatpacker’s chicken business previously suffered after executives misjudged consumer demand.

The company will shut the Emporia plant around Feb. 14, terminating 804 employees, and another five employees at a lab will lose their jobs on Jan. 31, according to a letter it sent to the Kansas Department of Commerce.

The plant has produced products such as seasoned and marinated meats and ground beef, according to Tyson’s website. Workers stopped slaughtering cattle there in 2008 due to tight supplies.

The company, which reaped big profits as meat prices soared during the COVID-19 pandemic, did not immediately respond to requests for comment. Its letter said the closures are part of a strategy to operate more efficiently.

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The proposed rule is the fourth introduced by President Joe Biden’s administration to boost competition in the highly consolidated meatpacking industry.

Earlier rules would require fairer pay to chicken farmers, enhance transparency in poultry contracts, and prohibit retaliation against chicken farmers for raising concerns about anti-competitive behavior.

The rule proposed on Tuesday would clarify how farmers and ranchers should prove they have been harmed by alleged anti-competitive behavior of meatpackers and will better enable the USDA to enforce antitrust laws, the agency said in a press release.

“Entrenched market power and the abuses that flow from it remain an obstacle to achieving lower prices for consumers and fairer practices for producers,” said Agriculture Secretary Tom Vilsack in a statement. “Today’s proposed rule stands for clear, transparent standards so that markets function fairly and competitively for consumers and producers alike.”

Farmers have argued that current regulations set the bar too high for proving they have been harmed by anti-competitive behavior, hindering their ability to seek recourse from USDA.

“Farmers have long deserved this certainty,” said Sarah Carden, research and policy development director for Farm Action, a farmer advocacy group.

The North American Meat Institute, a trade group, said in a statement the rule would expose meat packers to litigation and uncertainty.

“Under these proposed rules, everyone loses, the livestock producer, the packer and ultimately the consumer,” said Julie Anna Potts, the group’s president and CEO, in the statement.

The proposed rule will be open to public comment for 60 days.

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Strike votes were held on June 5-6.

“We had 84 per cent of the plant come out, so 341 of the people came out to vote on the strike ballot,” said Chris O’Halloran, executive director of United Food and Commercial Workers Local 401, which represents workers at the plant.

Results, however, have not yet been released. Cargill is objecting to votes cast by people on parental leave or those receiving benefits from the Worker’s Compensation Board, the union has said.

As a result, ballots remained sealed going into the weekend June 7.

Those objections covered about 34 eligible voters, the union said.

“The union feels it’s discriminatory to say somebody who is on maternity leave should not have the right to vote and participate in their contract negotiations,” said O’Halloran.

The labour board will now rule on whether those contested ballots should be opened and counted. That decision will be brought forward at a June 12 meeting.

The Cargill Case Ready plant produces counter ready meat. The meat comes from the Cargill beef processing plant in High River, Alta., and is cut, weighed and bagged at the Cargill Case Ready plant.

Worker issues include pay, lack of guaranteed hours and overtime, the union has said.

Ontario strike

A strike at the Cargill Dunlop Drive facility in Guelph is nearing the two-week mark. Nearly 1,000 workers at the beef processing plant went on strike at the end of May. The plant processes nearly 80 per cent of Ontario’s cattle.

Craig McLaughlin of the Beef Farmers of Ontario said everyone in that province is already feeling the impact, but feedlots are using other outlets to slaughter market ready animals.

The union workers at the Cargill Dunlop Drive facility have been without a contract since the beginning of 2024.

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Anec, an association representing global grain exporters, said on Tuesday access to the port of Rio Grande had been disrupted as a local rail line stopped operating. The group, which represents firms like Cargill and Bunge, also cited road blockades forcing grain trucks to travel an extra 400 kilometers (248.55 miles) through alternative routes to reach the port, increasing freight costs.

The unprecedented climate event, which left entire towns under water and destroyed critical infrastructure in the capital and rural areas, also killed livestock and caught farmers in the final stages of the corn and soy harvests, clouding the outlook for national grain production in 2023/2024.

The escalating crisis also led competing meatpackers to join forces to circumvent logistical hurdles brought about by the heavy downpours, which disrupted water and electricity services to 1.4 million people, the state’s Civil Defense agency said.

According to a local meat lobby, the meat companies began sharing resources to speed up delivery of feed and water supplies to chicken and hog farms, where an unspecified number of animals have perished due to the devastating floods.

Paulo Pires, president of Rio Grande do Sul farm lobby Fecoagro, said it was too early to know how much grain production had been lost due to the flooding that hit silos around river areas.

“They are large silos, so it is significant, but it is really difficult to quantify this,” Pires said by telephone.

Gedeao Pereira, president of agriculture lobby Farsul, confirmed isolated cases of food silos being hit but floods, but said they could dry in time and hence losses would be minimized. Pereira said he is more concerned with crops like soy which farmers have yet to harvest in Rio Grande do Sul, especially in center and southern areas.

Earlier on Tuesday, the state’s port authority said Rio Grande was “operating normally” as its terminals had not been affected by the rise in the level of the Laguna dos Patos lagoon.

At around 8 a.m. the current was ebbing in the access channel Rio Grande port, allowing water to flow at a speed of about three knots, the equivalent of 5.55 kilometers per hour, the authority noted. The tide table indicated a level of 90 cm above normal.

Cargonave, a shipping agency, confirmed slower grain arrivals at Rio Grande port, which last year had exported 10.4 million tons of soybeans and 3.6 million tons of soymeal.

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“This decision comes against a backdrop of falling production volumes, which has led the plant to operate at only 40% of its operational capacity,” the company said in an April 19 news release.

Operations at the plant will be “redeployed” to other Olymel facilities.

The closure will affect 135 employees, including 30 temporary foreign workers. The company said workers would be given the option to relocate to neighbouring plants.

Olymel has seen a spate of losses in recent years. It dialed back hog production in Alberta and Saskatchewan last year, and closed several processing plants in Ontario and Quebec, including at Vallee-Jonction, Sainte-Hyacinthe and Princeville.

Earlier this year, Olymel’s parent company, Sollio Cooperative Group, said it was back in the black after 2023’s losses, with Olymel posting a surplus of $138.3 million after a loss of $446.1 million in 2022.

The company said it achieved this via improved performance in fresh pork, reduced slaughter volume, consolidating plants and distribution centres, disposing of “non-strategic assets,” recruiting foreign workers to offset local labour shortages and focusing on value-added products.

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In a media release the group, which represents federally licensed meat packers and meat processors and suppliers of goods and services to the meat industry, said the move will challenge “…the ability for meat processors to fulfill the needs of Canadian consumers.”

On March 21, the federal government said it was tightening restrictions on the proportion of foreign workers allowed in certain sectors, including food processing.

In 2022 the federal government loosened the rules of its Temporary Foreign Worker Program Workforce Solutions Road Map in response to what it saw as a critical labour shortage in several industries.

Under those rules employers in the designated sectors were allowed to hire up to 30 per cent of their workforce through the TFW program for low-wage positions. All other employers saw their limit increased to 20 per cent, up from a ten per cent cap.

Those temporary measures are now being rolled back, a move the CMC says is “hasty” and “premature.”

“Through the decision to unilaterally end the temporary measures, this announcement has undermined the certainty we have been working with the government to create—with no notice or consultation,” the group wrote in its release.

According to figures from Statistics Canada’s 2022 Job Vacancy and Wage Survey, the food manufacturing sector had a 5.8 per cent vacancy rate, compared to a 5.4 per cent vacancy rate across all sectors. Meat product manufacturing had a 6.7 per cent vacancy rate.

That same report noted that in 2022, just over 70,000 TFWs worked in primary agriculture industries in Canada, and just over 36,000 TFWs worked in food and beverage manufacturing industries.

The CMC says reducing the number of TFWs working in the sector will impact processors, who had initially been promised the measures would run through to August of 2024.

“The removal of these measures without meaningful industry consultation will have significant consequences for processors who put food on grocery store shelves,” their release stated.

Chris White, the meat council’s CEO, linked the move to food affordability, saying it would increase food costs for Canadians.

“This is yet another unhelpful policy measure at odds with providing an end-product to consumers at a price-point they can afford,” White said in the release.

“We unequivocally refute the notion that employers are unduly reliant on temporary foreign workers.”

—Gord Gilmour is senior editor, news and national affairs, with Glacier FarmMedia

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“Not only have we restored profitability, but the trend we see for the coming years is encouraging,” said Pascale Houle, Sollio’s CEO in a Feb. 29 news release.

Sollio’s food division, Olymel, saw the greatest turnaround in 2023, the company said. It ended the year with a surplus of $138.3 million after a loss of $446.1 million in 2022.

The company said it achieved this via improved performance in fresh pork, reduced slaughter volume, consolidating plants and distribution centres, disposing of “non-strategic assets,” recruiting foreign workers to offset local labour shortages and focusing on value-added products.

Resumption of exports in some markets also boosted profits, the company said in the news release.

In 2023, Olymel dialed back hog production in Alberta and Saskatchewan and shuttered several processing plants in Ontario and Quebec, including at Vallee-Jonction, Sainte-Hyacinthe and Princeville.

Sollio’s annual report indicated that the number of hogs slaughtered declined, as did market share in Quebec.

The company said it saw sales of about $4.71 billion in 2023, up from $4.60 billion in 2022, it said in its annual report.

Exports to China decreased, due to more value-added production, the report said. Volumes of chilled pork shipped to Japan declined slightly as well.

“The launch of these same products in Canada was a great success,” the report said.

In the west, the company said it benefited from full access to the Chinese market. This partially explained an increase in sales, it said.

Sollio reported record profits in its bacon sector, and a decline in its poultry sector.

Olymel’s market share for turkey declined in 2023, the report said. Bird quality has been an issue, the company said, including with cysts in male birds.

“It appears that the production volumes in 2024 will have a negative effect on our results, amid increased imports of turkey meat from Chile,” the annual report said.

Further processed poultry produced higher margins in 2023 compared to 2022, with higher selling prices offsetting lower volumes sold.

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U.S. officials said the Labor Department had seen a nearly 70 per cent increase in child labour violations since 2018, including in hazardous occupations. In the last fiscal year, 835 companies were found to have violated child labour laws.

U.S. officials told reporters on a Monday conference call that the administration was probing the employment of children at companies including Hearthside Food Solutions and suppliers to Hyundai Motor Co. It has created an interagency task force on child labour, and plans to target industries where violations are most likely to occur for investigations.

The Democratic administration of U.S. President Joe Biden is also pushing for heavier penalties for companies that violate these laws, and more funding for enforcement and oversight, they said. U.S. federal law prohibits people under age 16 from working in most factory settings, and those under 18 are barred from the most dangerous jobs in industrial plants.

“This isn’t a 19th century problem, this isn’t a 20th century problem, this is happening today,” said one of the officials on the call. “We are seeing children across the country working in conditions that they should never ever be employed in the first place.”

The maximum civil monetary penalty is currently just US$15,138 per child, the administration noted in a press release, a figure that’s “not high enough to be a deterrent.”

The U.S. Department of Labor (DOL) opened an investigation into Hearthside Food Solutions, a U.S. food contractor that makes and packages products for well-known snack and cereal brands, for reportedly employing underage workers and violating child labour laws, officials confirmed on the call.

Reuters reported the DOL’s investigation into Hearthside earlier on Monday.

The company came under scrutiny following a New York Times investigation that said Hearthside’s factories employed underage workers making Chewy granola bars and bags of Lucky Charms and Cheetos, which the company would later ship around the country.

It was not clear whether the probe will lead to criminal charges, fines or other penalties. Hearthside said in a statement the company would “work collaboratively with the Department of Labor in their investigation and do our part to continue to abide by all local, state and federal employment laws,” and that they were “appalled” by the report alleging child labour at their company.

The Hearthside investigation is the latest in a rise in similar probes. Reuters last year published a series of stories on child labour including revelations about the use of child labour among suppliers to Hyundai, including a direct subsidiary of the Korean auto giant, in the U.S. state of Alabama.

The first story in the Reuters series, published in February last year, uncovered young teens working in dangerous chicken processing plants in Alabama.

Earlier this month, a major food safety sanitation company paid US$1.5 million in penalties for employing more than 100 teenagers in dangerous jobs at meatpacking plants in eight states, following another Labor Department investigation.

As Reuters previously reported, a record number of unaccompanied migrant minors entered the country in recent years, with many entering federal shelters and then released to sponsors, usually relatives, while immigration authorities resolve their requests for refuge in the U.S.

But authorities are struggling with long-term follow-up to prevent minors from being sucked into a vast network of enablers, including labour contractors, who recruit workers for big plants and other employers. At times they have steered kids into jobs that are illegal, grueling and meant for adults. The majority of minors Reuters found working were from Central America.

Separately, the Biden administration said earlier this year it will speed up the deportation relief process for immigrants in the U.S. illegally who witness or experience labour abuses.

“We also absolutely need to protect workers who do come forward and participate in wage and hour and other worker protection investigations and activities,” one official said on the Monday call.

— Reporting for Reuters by Nandita Bose in Washington and Mica Rosenberg in New York; additional reporting by Kristina Cooke in San Francisco and Joshua Schneyer in New York.

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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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