Beef recall ups prices, business for Ontario butchers

A Canada-wide beef recall has boosted business — and wholesale prices — for some butchers in Ontario.

The Canadian Food Inspection Agency on Sept. 27 suspended the licensing operation of XL Foods in Alberta after problems with E.coli.

XL Foods has one of the largest kill floors in North America and employs several thousand people.

Ted Farron, on the other hand, owns a butcher shop in Windsor, Ont. He said that since the recall and license suspension, his sales of ground beef has increased.

"I'm getting a lot of extra business now from people buying ground beef that don't normally. We had a fellow this morning who owns his own business bought trim from us in bulk to make ground beef," Farron said.

Nine cases of E. coli in Alberta have been linked to the meat processed by XL Foods, which processes one third of the country's beef.

Farron sells Ontario corn fed beef, which isn’t affected by the recall.

The executive director of the Ontario Cattle Feeders' Association, though, said the problems are XL Foods are far reaching.

"We’ve seen some consumers at the major retail level concerned with all beef," Jim Clark said.

Clark said because the recall is so broad and in the media’s spotlight, "consumers are watching closely."

"For the smaller butcher shops, things are good for them," Clark said. "It’s a bit of a boom for them."

He said customers recognize their local butcher, have long-standing relationships with them and have confidence in them.

Rising cost of beef

Greg Schinkel, a second-generation butcher who owns Schinkels’ Gourmet Meats in Essex, Ont., said he’s "never sold such much ground beef" than he has immediately after the recall.

Some of it was due to a 50th anniversary sale but Schinkel said "the recall affected it, too."

However, on Monday, he told CBC News the wholesale price for meat used in ground beef is up 50 cents a pound.

"I haven’t changed by prices on my counter yet. I prefer them to remain steady but if the prices stay that way it will affect the prices at my counter," he said. "When you don’t have a massive amount of product going to the market, it affects prices."

Clark said the recall and suspension of production at XL Foods has "sent major shock waves through the industry."

"When you have one packer is the size of XL Foods, and you pull that out of the market, there is definitely going to be a hole," Clark said. "It’s supply and demand."

Clark also said that a small price increase was inevitable due to the rising cost of grain and feed.

Clark said the short supply could last up to 21 days — longer if XL Foods isn't up and running by week's end.

Schinkel, meanwhile, said the bump in prices is "just a blip" and will wait before he reacts.