Prairie ranchers brace for potential strike at Cargill plant in Alberta as deadline looms

In the last two years, Prairie ranchers have been dealing with drought, soaring feed costs and pandemic disruptions that led to massive cattle backlogs. 

Now they are watching — and hoping — for progress on labour negotiations at the Cargill meat-packing plant in High River, Alta. The union representing workers at the plant issued a strike notice to the company earlier this month.

Staff could hit the picket line Dec. 6. 

"We are extremely, extremely concerned about that," Melanie Wowk, a rancher and chair at Alberta Beef Producers, said in an interview this week.

The Cargill facility is one of the largest in Canada. It's been estimated that the facility processes about a third of Canada's beef.

Cargill spokesperson Daniel Sullivan said Thursday an agreement has yet to be reached.

But he said the company is optimistic they will be able to reach an agreement, and Cargill is working toward that before the union's strike deadline.

A spokesperson for UFCW Local 401 could not be reached for comment, but a strike notice issued on behalf of workers said employees at the plant have raised health and safety concerns related to COVID-19. 

Last year, a COVID-19 outbreak saw at least 950 staff at the facility — nearly half its workforce — test positive. Two worker deaths were linked to the outbreak, which temporarily shuttered the plant. 

The union has said workers also want improved benefits, for the company to move workers who are awarded new jobs to those jobs quickly and reasonable wage increases. 

Ranchers hope the two sides can find common ground soon.

Wowk is concerned a strike at the Cargill plant will lead to another cattle backlog, pointing to those experienced last year when the pandemic spurred temporary closures of meat processing plants.

The disruption to processing in North America pushed meat prices higher at grocery stores, but had the opposite effect down the supply chain, where a backlog of cattle emerged. 

Ranchers say cattle prices have not kept pace with rising costs, nor with the beef prices seen in grocery stores recently.

They're also trying to manage the fallout of this summer's drought that hit pasture land and helped drive up farmers' feed costs dramatically.

Experts have suggested up to 20 per cent of the Canadian cattle herd could be sold off this fall and winter as producers are forced to decrease the size of their herds or go out of business. 

"Because of the drought and the inability to obtain feed, a lot of cows went to processing this year and are waiting in feedlots for that to happen," Wowk said.

"Oh boy, if Cargill goes on strike, we are going to see another backlog."

Tyler Fulton, president of the Manitoba Beef Producers, said he has no doubt that if there's a long-term stoppage at Cargill that ranchers in his province would see declines of 10 to 20 per cent in the prices paid for their calves.

But he said he's hopeful it won't come to that, adding "I think both parties know the implications."

Cargill said while they are optimistic an agreement will be reached before there is any impact to producers, they "are in communication with our cattle suppliers about contingency plans should they be necessary." 

"While we navigate this negotiation, we will continue to focus on fulfilling food manufacturer, retail and food service customer orders," Sullivan said in an email.

"We will shift production to other facilities within our broad supply chain footprint to minimize disruptions to our product delivery."

While some ranchers are weighing up whether they can stay in business amid rising feed costs, Canadians have seen retail meat prices continue to climb, up 10 per cent on average over the last year, according to Statistics Canada. 

"Labour shortages that have slowed down production, ongoing supply chain challenges and rising prices for livestock feed continued to factor into higher prices for meat," the agency said.

Mike Von Massow, a food economist and professor at the University of Guelph, said if a strike closed the Cargill plant it would put more upward pressure on retail beef prices.

"But it would be relatively moderate," he said. "We have this sort of integrated market. The beef wouldn't be coming out of that Cargill plant, but product would move from the U.S. We'd see imports. And so that product would be backfilled." 

Von Massow said the stakeholder most significantly hurt by a long-term closure at Cargill is the beef industry that leads up to the processor, such as producers and feedlot operators.

If a dispute were to close the plant for a long period of time, there would be the potential for significant farm failures in the beef industry, he said.

"If it went on for months and months, we would beef in the grocery stores too," Von Massow said. "But it would be another blow in a very, very difficult year for beef producers."