New big beef plants needed, government support would help – again

In contemplating large commercial meat processing in Alberta, one is moderated by the perspective that it’s a mature industry hampered by perceived technological and occupational constraints. 

The Covid-19 outbreak and its consequences have highlighted that these massive processing facilities require a considerable and vulnerable labour force. 

Workers standing close to each other is the accepted norm in a big plant, which has not changed much over the past 100 years. 

Compared to other food production sectors, most of whom have embraced extensive automation, meat processing seems somewhat outdated. 

That’s not to say automation hasn’t occurred in big meat plants but one wonders can it go further and what are the constraints. 

The ongoing opinion is that because plants are processing a biological and variably-sized product, robotics and other forms of automation are challenging to utilize. 

But surely advances in sensor devices are making processing technology more flexible in dealing with carcass and meat product variability. 

I cite a highly automated pork plant built by Danish Crown, the largest pork processor in Europe. 

They utilize automation and robotics to reduce high Danish labour costs. The plant processes up to 15,000 hogs per day. 

It’s said it paid for itself in less than 10 years. 

As expected, its automation is continually fine-tuned and improved. Some of this plant’s pork is exported to the USA (itself a low-cost producer) unlikely not at a loss. 

There is a message here for the meatpacking industry in Alberta – I would suggest automation and robotics works.

I expect Cargill and JBS, two of the largest meat processing companies in the world, have been researching efficiencies and automation continually. 

The question is, why have they not built highly automated robotic plants – surely they are aware of the success of the Danish plant. 

Perhaps it is just a matter of economics – is labour just cheaper in North America than in Denmark, so why bother with costly automation. 

However, both the High River and Brooks beef plants are over 25 years old; one suspects they are coming to the end of their useful life despite continuous modernization. 

Perhaps both companies have plans for their plants. The question for the entire Alberta  beef industry is, do those plans include the future existence of those plants in those locations. 

Maybe there are secret corporate strategies to close either plant and build massive new automated plants in the USA. They could then just import live cattle from Alberta; our feedlots have a long history of transporting countless head of slaughter cattle as far away as Colorado. 

Depending on the size of new plants, that approach would make sense from economies of scale perspective. 

The downside to that scenario is the overall economic repercussions of closing either plant and the loss of 5,000 much-needed jobs. 

Remember, the two big Alberta plants, when established, were instrumental in the closing of medium-sized meat processing plants across Canada. 

Could a couple of massive new US-based plants built by the same companies cause the closure of either of their two Canadian plants? I would suggest that history has a habit of repeating itself. 

The Alberta government back in the day provided incentives for both plants to be built or expand. 

In the case of the High River plant, it provided an outright grant of $5 million to lure Cargill to build their plant. 

Considering the billions of taxes and revenue that plant has generated to the beef industry, it was one of the most profitable investments ever made by the Alberta government. 

One hopes the government has been in discussion with both companies as to their future intentions in this province. 

Hopefully, our government is ready to offer incentives to build giant new automated robotic processing plants to replace existing ageing facilities.  

Such high-tech plants could be a North American first in meat processing. 

Considering some of the fall-out from the pandemic, building new plants with less labour and much less worker interaction would be opportune. 

The last thing Alberta needs is the closure of either big plant and its economic devastation to the cattle and beef industry. 

If the government hasn’t already done so, it needs to discuss the issue with both companies. 

It should be proactive in finding ways and means to keep beef processing on the cutting edge of new plant development in Alberta – just like they did 30 years ago! 

History needs to repeat itself but in a positive way. 

Will Verboven is an agriculture opinion writer and policy consultant.

 

by Will Verboven

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