The pandemic has spotlighted packing industry concentration this year. People in the beef industry have been aware of these issues for some time, of course, but I even have friends outside ag who have been talking about it lately. Many want to see more, smaller federally inspected plants.
It takes a tremendous amount of money, strategy and industry acumen to build and operate a federally inspected plant of any size. The regulations are extremely complex, the capital costs huge, the operations costly and challenging. A smaller plant is either going to have to carve out its own niche so it’s not directly competing with larger plants or run with the big dogs, which is very tough given the efficiency and scale of those big plants.
Smaller plants do still exist in North America and more are in the works. If you read Prime Cuts from our Sept. 7 issue, you can read about a new one that is planned for Idaho. Canada Beef has a list of federally inspected plants in each province at canadabeef.ca/federally-registered-meat-packers/.
One of those plants is Alberta’s Harmony Beef, originally called Rancher’s Beef and built by beef producers post-BSE. Several years ago, the plant was purchased by the Vesta family. Canadian Cattlemen covered the plant’s purchase and renovations, and readers can still find those articles on our website. A 2015 article by Deb Furber notes that although the plant was a state-of-the-art, federally inspected and European-approved facility built in 2006-07, it still required several upgrades to meet the requirements of the Vesta family’s targeted markets. Furber, who toured the plant with owner Rich Vesta, describes exactly how the plant works in clear language. It’s worth a read.
Also worth a read is Steve Kay’s Prime Cuts column from April 2017. Kay notes that Vesta, a packing industry veteran, has a “superb grasp of what makes a beef processing plant work and how to market beef successfully.” Vesta, who Kay describes as a “people person,” will “get the best out of those staffing the plant.” His attention to details means that Harmony Beef will produce “extremely high-quality beef for carefully targeted markets,” Kay writes.
Getting a federally inspected plant up and running also takes time. True North Foods is a smaller federally inspected plant in Manitoba. It took them two years to obtain federal certification from when they broke ground, the company’s website notes. Harmony Beef also took years to come back online as a federal plant, between the renovations and approvals of various levels of government.
One idea that’s been floated around is loosening regulations so that meat from provincially inspected plants can be sold between provinces. If one of the big plants ever goes down again, we’ll still be in trouble, but perhaps this flexibility could help with any regional issues.
Several provincial beef groups, along with other farm groups, have been calling for interprovincial trade for years. Trish Tetz, a beef producer and co-owner of Craft Beef Company, also made the case for interprovincial sales during the Canadian Beef Industry Conference.
Craft Beef Company is a new company that sells meat directly to consumers from operations in Alberta. Tetz said that federally inspected plants will always be essential to the industry, but there are people who want to purchase directly from farmers. Allowing interprovincial sales would support producers who want to sell directly to the public as well as provincially inspected plants.
Tetz noted that provincial plants are having a difficult time growing, and there are areas with few provincial plants. Giving these plants more market access could help. She also noted that how customers want to interact with retailers is in flux right now. That’s my sense, too, and perhaps if regulations were more supportive, we could see more innovation and more small businesses launch that are adapting to customers’ needs. Given the pandemic-induced recession, this is more important than ever.
Back in May, the Canadian Food Inspection Agency announced a temporary exemption that would allow meat and poultry from non-federal plants to be traded across borders if meat shortages emerge during the pandemic. But as Alexis Stockford reports in the Manitoba Co-operator, plants would have to prove a meat shortage exists, which would likely be time-consuming and not necessarily straightforward. Stockford adds that provincial governments have been calling for more interprovincial trade in general, pandemic or no pandemic. However, perhaps this exemption is a trial balloon of sorts that could lead to more long-term changes.
To me, potential benefits are more long-term than pandemic-focused. Selling provincially inspected meat between provinces could help producers who are direct-marketing expand their reach, as well as the processors they work with. If you’re considering building a plant near a provincial border, the prospect is much more appealing if that meat can be sold on both sides of the line. For producers who sell all or most of their calves through the auction marts, direct marketing a few (or a few more) animals might be more appealing with a bigger market. This could give producers another income stream.
No doubt we need consistent, stringent federal standards for meat destined for international markets. But provincial inspection standards are generally considered high as well, and surely regulations can be adapted to out-of-province sales.
Ultimately, to me, it all comes down to one question: Is provincially inspected meat deemed safe in one province therefore safe for residents of neighbouring provinces? If the answer is yes (and I think it is), then why are we prohibiting those sales? If the answer is no, we have a whole other set of problems.