What a strike at one of Canada’s largest meat processing plants could mean for your grocery bill

EDMONTON – A potential strike at one of Canada’s largest meat-processing plants is almost certain to drive up meat prices for consumers on a product that is already prohibitively expensive for a growing number of Canadians.

And there are even bigger implications for producers, restaurant owners, and other volume buyers, such as fast food chains.

On Wednesday, United Food and Commercial Workers Local 401, which represents thousands of workers at Cargill’s meatpacking plant in High River, Alta., Officially notified the company of a strike on Dec. 6 after two days of negotiations. .

The facility is responsible for about a third of the meat processed in Canada, or about 4,500 cattle per day, which means there would be significant repercussions in the event of a work stoppage for anyone who consumes, produces or sells the meat in Canada, observers . tell.

A disruption in the supply chain could mean incremental increases in the cost of meat for consumers, says Mike von Massow, a food economist and associate professor at the University of Guelph.

It doesn’t mean supermarkets will run out of meat, he said, but the longer the strike, the higher the prices.

“Within a couple of weeks (of a strike) we would see a significant disruption in the market and if the strike continued through the Christmas season, we would see significantly higher prices through December and early January,” von Massow said.

On the other hand, Cargill accepting a wage increase for workers could also increase the price of beef, suggested Sylvain Charlebois, a professor at Dalhousie University and director of the Laboratory for Agri-Food Analysis.

Charlebois said beef is already getting harder to justify for many consumers. The price of beef rose roughly 15 to 17 percent in 2021, and that was before the current outlook for a labor dispute.

In fact, Charlebois said he does not expect meat prices to increase dramatically in the event of a strike or wage increase, because they are already too high.

“It is more difficult for ranchers to feed their cattle, that is one factor; the other factor is indeed COVID, due to supply chain disruptions, transportation costs and labor (shortages) … The socio-economics (of meat) at the meat counter really makes less sense for a growing number of people, ”Charlebois said.

A September survey by the Agri-Food Analytics Lab found that 49 percent of Canadians claimed to have reduced their purchase of meat products due to higher prices, with the lowest figures in Ontario and Quebec (46 percent) and the highest figure in Alberta (57 percent).

A Statistics Canada report released last month shows that the price of a kilogram of round steak increased from $ 18.53 in May 2021 to $ 20.01 in September. Prime rib roasts recorded the largest increase, from $ 38.60 to $ 43.02, while ground beef recorded the smallest increase.

However, a strike and a supply chain bottleneck could have major implications for high-volume buyers like McDonald’s, which is one of Cargill’s most important customers, if not the largest, Charlebois said.

Restaurants will offset the price hike on their menus, Charlebois said, adding that overall, restaurant menu prices are already expected to rise next year.

One of McDonald’s current marketing strategies is to promote its commitment to 100% Canadian meat. During the closures at the Cargill plant last summer, the company said it would not be able to meet that commitment and had to stock up on American beef.

“That is a perfect example of how the system will be adjusted to ensure that the product is on the shelves,” said van Massow.

The biggest losers in the event of a strike would be the meat producers. They will have to hold on to their animals longer, but they still have to feed them, which could make the cows really lose value because they grow larger than ideal.

“A strike at the Cargill plant will have a much greater impact on Canadian livestock producers, an important part of Alberta’s economy, than it will on Canadian beef consumers,” van Massow said.

“If I can’t buy finished cattle, I can’t bring in new cattle, it somehow supports the entire supply chain. So for me a strike is catastrophic for producers and uncomfortable for consumers ”, he added.

Tom Hesse, president of the UFCW, said it was a “ball of discontent” that drove his members to 97 percent of the strike vote, with a turnout rate of 80 percent.

There has also been a call from workers for additional compensation, given that employees have reported during the course of the pandemic to a workplace that has experienced COVID-19 outbreaks.

He did not cite a specific figure for a salary increase.

“(There is) the notion of compensation of payment for work, risk, what they have gone through. And I’m not sure you can calculate that. ”

He said there are huge disparities in what workers earn, depending on whether they are working the shop floor or doing a more specialized job, such as that of a carpenter. He said meatpacking production workers earn an average of $ 20 to $ 25 an hour.

In a statement, Cargill spokesman Daniel Sullivan said the company has yet to reach an agreement, but is optimistic that it will be able to do so before the December 6 strike deadline.

“Over the past two days, our company and the union representing employees at our High River protein plant have exchanged multiple comprehensive proposals that included increased wages far beyond the industry standard, better benefits for employees. employees and cash (bonuses) for active employees. We believe that our proposal is very fair and representative of our values ​​of putting people first and doing the right thing, ”the statement reads.


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