June 23, 2014
Cattle slaughter in Canada is expected to reach its lowest in almost two decades as a lack of manpower has affected production for major meatpackers including Cargill Inc. and JBS SA, according to an industry group.
Meatpackers may slaughter 2.51 million head of cattle in 2014, the lowest since 1995 and down 3% from 2013, said Brian Perillat, a senior analyst at Calgary-based Canfax, a market-research unit of the Canadian Cattlemen's Association. Labour shortages at processing plants and industry consolidation are contributing to the decline, he said.
Seven of the nation's largest beef and hog-processing plants are running at 77% capacity amid a shortage of qualified workers, according to the Canadian Meat Council, which represents packers including Cargill, JBS and Maple Leaf Foods Inc. The slowdown is expected to cost the industry as much as US$279 million this year even as beef prices climb to all-time highs.
"As we lose critical workers in the plant, there will be a corresponding decrease in our ability to process meat," said Ron Davidson, a spokesman for the Canadian Meat Council. "We need workers there, or you can't run your line speed at the normal speed."
Meat packers need as many as 1,000 more workers nationwide, and the situation may worsen as government rules are making it more difficult to recruit temporary foreign employees, who account for 10% of the laborers, Davidson said. Processing plants are unable to purchase as many animals for slaughter due to the labour shortage, while feedlot operators are selling more animals to the US, he said.
Exports of Canadian feeder cattle to the US in 2014 have risen 44% from a year earlier, the USDA said in a June 18 report.
Cattle herds have declined in Canada and the US, thus increasing competition for available animals, said the manager of federal-provincial relations for the Canadian Cattlemen's Association, Ryder Lee. US plants, which are running more efficiently, can bid more for animals, leading to a drop of Canadian beef supplies, he added.
