By some reports, 70 per cent of all cattle processed in Canada goes through one of the two plants in Lethbridge or Brooks. The Cargill Lethbridge plant alone was putting through 4,500 animals each day.
COVID-19 troubles at both plants are said to be causing consumer prices to rise. Conversely, prices paid to ranchers and feedlots are going down. The consumer prices are because worries plant closings or worker illness might mean coming shortages.
On the other end of the supply chain, producer income is going down because of the cost of stockpiling animals still on the hoof.
This story plays over and over again. With the Wuhan COVID-19 virus, Western countries suddenly discovered they had little manufacturing capability to make face masks and personal protective equipment. Most factories were in China. It is also thought, China was possibly secretly importing and hoarding such supplies before the virus was well known. Worse, factories needed to make vaccines and potential drugs have been outsourced to, where else? China.
One supposes if it were cheaper to send beef and pork on the hoof to China, there would be no worries about plants closing in southern Alberta today.
The factories would all be overseas! The simple fact is, there might be 50 plants cranking out products.
If one burns down, no big deal. Just make the other 49 work a bit harder. But what happens if all those plants are overseas in one country? And somebody makes a silly objection over the way a news story is written or hair is combed?
Uh, oh! 2008 crisis all over again!
Then, big banks believed critical to the system were propped up and kept going, no matter what the cost. Just to keep the system working. Hundreds of thousands of people lost their homes, but big banks, too big to let fail, chugged along.
This “too big” message still hasn’t sunk into the minds of eastern Canadians. Oil and gas companies across the board are struggling, with many already having closed their doors. More failures are on the way. Ottawa, and eastern voters, see this as hundreds and hundreds of little companies, not as a major industry. Not big players, like Bombardier or SNC-Lavalin, those so-called Quebec stalwarts of the Canadian economy. Energy companies aren’t seen as a whole, together, as a few massive pieces of the Canadian landscape.
So, when a Cenovus or Baytex is in trouble, nobody raises an eyebrow in New Brunswick or Hamilton. Not even like Hudson’s Bay or Reitmans or General Motors. Heck, grain farmers don’t even get the same respect as Quebec or Ontario dairy farmers.
There shouldn’t be huge plants like Cargill or JBS. Yes, it costs more. There still should be small plants right across the Canadian meat producing landscape. Smart companies, whether it be oilsands plants running hundreds of small machines instead of a handful of monster bucket wheels, or Coca-Cola, which has hundreds of identical bottling plants around the world, work this way. We should pay attention.