Is there a shelf life for Alberta’s beef plants?
Pandemic may lead to closures or high-tech changes, Will Verboven says.
The COVID -19 outbreak and its consequences have spotlighted the operations of Alberta’s two giant beef-processing plants and their large and vulnerable labour force. Shoulder-to-shoulder workers are the rule in such plants, which has not changed much over the past 100 years. Compared to other food-production sectors, many of whom have embraced extensive automation, beef processing seems somewhat outdated. That’s not to say automation hasn’t occurred in big meat plants. It has, but one wonders if it could further and what are the constraints.
The view is because such plants are processing variably-sized meat products, robotics and other forms of automation are challenging to utilize. But advances in sensor devices are making meat-processing technology more flexible in dealing with carcass and product variability. I cite a highly automated pork plant built by Danish Crown, the largest pork processor in Europe. It utilizes extensive automation and robotics to reduce high Danish labour costs. The plant processes up to 15,000 hogs per day. Is there a message here for the meat-packing industry in Alberta? Maybe high-tech automation and robotics work.
The owners of the Alberta beef plants, Cargill and JBS, are two of the largest meat-processing companies in the world, and I expect they have been researching processing efficiencies and automation extensively. The question is, why have they not built highly automated robotic beef plants? Surely, they are aware of the success of the Danish plant. Perhaps, it is a matter of economics — labour may just be cheaper in North America than in Denmark, so why bother with costly robotics? However, both the High River and Brooks beef plants are over 25 years old; one suspects they may be coming to the end of their useful life despite continuous modernization.
The question for the entire
Alberta (Canadian?) beef industry is: are there any plans for the future existence of those plants in those locations? Maybe there are corporate strategies to close either plant and build massive new automated robotic plants in the U.S. They could then just transport cattle from Alberta to those new plants; our feedlots have a long history of trucking slaughter cattle as far away as Colorado. It would all make sense from economies of scale perspectives. The downside to that scenario is the economic repercussions of closing either plant and the loss of 4,000 much-needed jobs. There is a worrying precedent; the two big Alberta beef plants, when originally established, were instrumental in the closing of medium-sized meat-processing plants and the loss of jobs across Canada. Could any massive new U.s.-based plants built by the same companies cause the closure of either of their Canadian plants? I would suggest that history has a habit of repeating itself.
Back in the day, the Alberta government provided various incentives for both plants to be built and expanded. Cargill received a grant of $5 million to lure it into building in High River. What may be needed again are new incentives to build giant new automated robotic processing plants to replace the existing aging facilities. Such high-tech plants could be a North American first in beef processing. Considering some of the fallout from the pandemic, building new plants that use a reduced workforce with much less worker interaction would be opportune. One suspects other jurisdictions are already trying to attract such new plant development with tax incentives.
The last thing Alberta needs is the closure of either big processing plant and the inevitable 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 to keep beef processing and jobs at the forefront of new plant development in Alberta — just like they did 30 years ago! History needs to repeat itself but in a positive way.