'Couldn’t come at a worse time': Analysts worry about potential impacts from Cargill strike

CALGARY -

You may have noticed record high prices at the meat counter recently and according to analysts, you could see fewer options and a major impact to beef producers if workers at the Cargill plant in High River, Alta. go on strike next month.

The United Food and Commercial Workers Local 401, which represents some 2,000 workers at the meat processing plant, delivered a strike notice to Cargill representatives Wednesday after 97 per cent of workers voted in favour. They’ve been without a contract since the end of 2020 and are demanding fair compensation and a safe workplace.

The cost of beef has skyrocketed to record highs since late 2020, due largely to a rise in grain prices, supply chain issues and labour disruptions, but analysts don’t expect a strike at the plant to translate into even higher prices for consumers.

“Grocers may decided not to carry as many products at the meat counter when it comes to beef. They’ll probably fill the space with more poultry, more hogs really so more pork,” said Sylvain Charlebois, senior director of the Agri-Food Analytics Lab at Dalhousie University in Halifax.

“Consumers have options, you have the meat trifecta with chicken and pork and they can go pick another type of meat.”

That will only happen if the plant shuts down due to a labour disruption, which Charlebois believes is very unlikely.

“I don’t think Cargill can afford a labour dispute, they’ll have to settle and if they do settle than wages will go up significantly," he said.

In a statement on Thursday, UFCW Local 401 president Thomas Hesse said if a deal isn't struck by Dec. 6, workers will go on strike.

"A picket line will be highly visible, and a strike appears to be a viable weapon in achieving a fair offer in negotiations," the union said.

“They want compensation for everything they’ve went through,” said Hesse. “How do you really put a number on the kind of suffering that these workers have felt? Hundreds of them got the disease, some slept in the garage because they were terrified to give it to their family.”

MAJOR BEEF PRODUCER

Cargill handles around 35 per cent of beef processed in Canada, with some 4,500 head of cattle slaughtered a day.

The facility had to shut down during the pandemic due to a massive COVID-19 outbreak, with around half of all workers contracting the virus and the deaths of two employees.

“Closing the plant for a while is going to be a problem for the entire sector. With the 26 last year I believe it took four months for the entire industry to get back to some kind of normal,” said Charlebois.

Cattle producers would likely take the biggest blow from a shutdown after already enduring one last year along with other challenges from the pandemic and a tough drought season.

“The biggest losers would be farmers by far, they would be stuck with excess inventory and would have to continue to feed cattle," said Charlebois.

"The grain market is quite expensive these days so they would have to keep on feeding cattle with highly expensive prices for feed. So if there’s a labour dispute farmers are highly vulnerable right now.”

COULDN'T COME AT A WORSE TIME

The Alberta Cattle Feeders says a strike couldn’t come at a worst time.

Grain prices have almost doubled from a year ago and says if Cargill shutdown next month it will only compound the problems facing farmers.

“Plants are behind already with labour shortages and processing cattle,” says “Unfortunately it’s going to be so hard on our industry, I’m just not sure how we’re going to recover and some people are going to be absolutely devastated by it financially.”

On Wednesday, a spokesperson for Cargill said they negotiations were still taking place and remained optimistic an agreement will be reached.

"At Cargill, we greatly value our employees and the work they do to feed Canadians. Over the last two days, our company and the union representing employees at our High River protein facility have exchanged multiple comprehensive proposals that included increased wages well beyond the industry standard, enhanced employee benefits and cash bonus’ for active employees," read a statement.

"We believe that our proposal is very fair and representative of our values to put people first and do the right thing.

"Unfortunately, we have yet to reach an agreement.  However, we are optimistic that we can, and we will continue to work towards an agreement by the Union’s Dec. 6 strike deadline. We remain focused on employee safety, ensuring farmers and ranchers have access to markets and providing meals for families across Canada."