JBS CANADA BREAKS GROUND ON BEEF DISTRIBUTION CENTER
A groundbreaking ceremony was held in June as JBS Canada initiated the construction of an $80 million ($58.2 million USD) beef distribution center at its Brooks, Alberta location.
President of JBS Canada, Celio Fritche, acknowledged the pivotal role of the workforce in facilitating such a substantial investment. He expressed gratitude for their unwavering dedication to feeding Canadians daily, underscoring their contribution to the company’s success.
Over 1,000 JBS employees participated in the groundbreaking ceremony, highlighting the enthusiastic support for this development. JBS Canada’s acquisition of the Brooks beef facility in 2013 laid the groundwork for this expansion, reflecting the company’s commitment to growth and innovation.
Wesley Batista Filho, CEO of JBS USA, commended JBS Canada for its exemplary performance in the beef industry, positioning it as a model for other business units in North America. He emphasized that the new distribution center will enhance JBS Canada’s operational efficiency and technological advancements, ensuring its continued success.
“This distribution center will ensure that JBS Canada remains on the cutting edge of supply chain technology, and we look forward to its completion,” Batista Filho said.
The distribution center is slated for completion by the fourth quarter of 2025, with a focus on increasing shipping capacity by up to 40% and improving overall efficiency. Furthermore, the center is expected to reduce storage costs, minimize errors, and enhance worker safety, aligning with JBS’s commitment to sustainability and operational excellence.
“Our team members are the reason that JBS Canada is able to make such a substantial investment in Brooks,” said Celio Fritche, president of JBS Canada. “Thank you, for your hard work, dedication and for working to feed Canada each and every day.”
In a strategic move towards automation, JBS announced a partnership with Scott Technology in 2022 for a $71 million project aimed at automating warehousing operations. This initiative underscores JBS’s commitment to leveraging cutting-edge technology to enhance its supply chain and operational efficiency. July 2024
CMC
AND MEAT INSTITUTE CALL FOR
ENHANCED
REGULATORY COOPERATION
IN
NORTH AMERICAN MEAT TRADE
The Canadian Meat Council (CMC) and the Meat Institute have jointly submitted a comprehensive set of recommendations to the Canada-US Regulatory Cooperation Council (RCC) to bolster regulatory cooperation and alignment between Canada and the United States. In a joint letter to Canadian government officials, CMC and the Meat Institute aim to address regulatory divergences, redundancies, and inefficiencies that hinder the integrated North American meat and poultry market.
Chris White, President and CEO, Canadian Meat Council stated, “Together, our industries produce some of the highest-quality, safest, and most nutritionally dense products in the world, playing key roles in advancing food and economic security at all levels. By streamlining regulatory and customs procedures, eliminating non-science-based trade barriers, and enhancing collaboration on global issues such as technology, sustainability, and foreign animal disease, the Canadian
and U.S. governments can promote greater resilience, cooperation, and growth within the North American meat industry.”
CMC and the Meat Institute have put forward several regulatory reform recommendations to streamline and facilitate trade within the North American market, including to establish joint food safety risk assessments and promote mutual recognition of food safety technologies approvals. The recommendations also include several CUSMA pilot project proposals to institute pre-screening and streamline sampling across borders.
CMC and the Meat Institute urge the RCC to address several trade priorities and impediments that continue to affect the meat industry, such as facilitating U.S. live hog exports to Canada, converging food safety technology approval processes, and eliminating restrictions on veal imports from the U.S.
NSF INTERNATIONAL FOCUSES ON CANADIAN FOOD INDUSTRY WITH NEW WEBSITE FOR SERVICES IN CANADA
The organizations highlight the importance of the Canadian and U.S. governments, in coordination with their respective meat industries, committing a renewed focus on regional cooperation to mitigate risks and ensure trade continuity. The meat industries in the US and Canada share a high level of integration and alignment. Both groups have expressed concerns about the voluntary Product of USA label final rule with which establishments must comply by January 1, 2026.
Global public health organization showcases services for Canada’s growing and fast-changing
to the global public health organization’s expertise and services in Canada. The website combines information on the depth, experience and capabilities of the NSF International Canadian office with access to NSF International’s global services dedicated to food safety and quality.
Evolving regulations across countries and increasing complexities associated with a globalized food supply network present challenges for NSF International clients in Canada and around the world. The new Canadian website offers expertise and services to help companies navigate these challenges, including certification and auditing, consulting, technical services, training and education, food and label compliance, packaging, and product and process development.
NSF International’s Canadian website provides information on the following services:
Certification & auditing: Third-party food safety audits and certifications, which are integral components of supplier selection and regulatory compliance. Accurate audits are the first step toward successful verification of a company’s food safety system, providing improved brand protection and customer confidence. Certifications and audits are available for animal and produce in the agriculture industry, GFSI certification and management system registration.
“CMC and the Meat Institute recognize ongoing industry and governmental collaboration is critical to preserving market integration, is vital to the future growth of our respective industries and is integral to the communities and workers we support, said Julie Anna Potts, President and CEO, Meat Institute. Onerous, duplicative regulations and processes, however, serve only to hinder the significant progress North American meat and poultry packers and processors have made to bolster supply chain efficiencies, to ameliorate food and worker safety, to combat environmental degradation and embrace sustainable development, and to feed growing North American and global populations through innovative advancements that produce more food using fewer resources. The RCC offers an important opportunity for our governments to engage in more frequent, formal exchanges to complement ongoing industry coordination. Through the RCC, many of the regulatory and legal barriers that undermine our industries’ interdependence and jeopardize the livelihoods of the workers and communities we support can be discussed, debated, and resolved in a manner that upholds our governments’ commitment to advancing science- and risk-based trade without sacrificing food safety and public health.”
Consulting: A full-service team approach providing technical resources, expertise and insight for a wide range of food safety and quality services. NSF International provides finished product inspection testing for food, packaging and non-food testing for rapid analysis and insight to protect the brand, technical support services from on-site temporary or permanent technical staffing placements, and various types of consulting.
Technical services: compliance and formulation, from concept to finished product, including food and label compliance, packaging, product and process development, and shelf-life and product evaluation.
Training and education: and beverage industry across the supply chain as an
RECOMMENDATIONS FOR REGULATORY REFORM
CMC and the Meat Institute have put forward several regulatory reform recommendations to streamline and facilitate trade within the North American market, including to:
* Establish joint food safety risk assessments to deliver the best possible science at the earliest stage of decision making;
* Promote mutual recognition of food safety technologies approvals in the North American market;
* Enhance sampling transparency (e.g. rate of sampling, targeted pathogens, etc.) and support timely communication of test results; and
* Revise sampling plans to reduce product destruction at the border.
CUSMA REGULATORY COOPERATION PILOT PROJECT PROPOSALS
The recommendations also include several pilot project proposals – to be implemented on a more limited trial basis – with the goal of eventual permanency or the adoption of core tenets of each proposal. The CUSMA proposals include:
* The implementation of a laboratory sampling pilot program – a proposal for products to be sampled at the originating facility instead of conducting border reinspection of products;
* A pilot project to demonstrate the feasibility of eliminating border re-inspection of meat that has already been inspected by the USDA or CFIA;
* A proposal to remove the outdated 50-mile rule, which arbitrarily restricts import inspection activity within 50 miles of U.S. ports of entry;
* A pilot project to institute pre-screening and sampling of randomly selected containers of products “For Further Processing” at the port of departure before shipping to the U.S.; and,
* A proposal to return imported shipments to Canada for processing instead of holding, pending U.S. test results.
The North American meat industry represents one of the most integrated supply chains globally, with cross-border trade in livestock and meat products exceeding USD 16 billion annually. Since the inception of NAFTA in 1994 and its successor, the Canada-U.S.Mexico Agreement (CUSMA) in 2024, the economic interdependence of the meat industries in Canada, the U.S., and Mexico has grown exponentially. This integration supports local communities and workers across borders, driving economic growth and
In 2023, the U.S. meat and poultry exports exceeded USD 23.6 billion, with significant portions of beef, poultry, and pork production destined for international markets.
Similarly, Canada exported 70% of its pork and 50% of its beef production, with the U.S. representing the largest export market. The meat sector remains one of Canada’s largest manufacturing sectors, contributing significantly to the national economy and employment.
PROPOSED CHANGES WILL HURT PRODUCERS AND CONSUMERS
The latest proposed rule change to the Packers and Stockyards Act by the Biden Administration is attempting to set meat production back decades by encouraging litigation and limiting how livestock producers can market their animals to packers. In the proposed rule, USDA attempts to circumvent Congress and the courts to reverse the longstanding legal standard that parties must demonstrate harm to competition to sue and win under the Packers and Stockyards Act Section 202(a) or (b).
Removing the need to show harm to competition will encourage frivolous lawsuits. To protect themselves, meat packers may be forced to curtail the use of Alternative Marketing Agreements (AMAs) to minimize these costly litigation risks.
“Unfortunately for the Biden Administration, Secretary Vilsack has tried these changes before,” said Julie Anna Potts, President and CEO of the Meat Institute. “They have failed before the courts, conflict with Congressional intent and are a blatant attempt to pick winners and losers in the marketplace. Under these proposed rules, everyone loses, the livestock producer, the packer and ultimately the consumer.”
Portrayed as an effort to increase competition, this government interference comes when fed cattle prices were at record levels for most of 2023, surpassing the 2014-2015 previous record highs, and now, well into 2024, cattle prices remain at record levels.
“What is the Biden Administration trying to fix?” said Potts.
And the cattle price outlook for 2024 continues to be bullish, with USDA projecting the annual average price of cattle to increase over the 2023 record based on a smaller cattle supply.
Contrary to USDA’s assertion, these changes would introduce uncertainty into the market and de-couple the demand signals producers receive from beef consumers, including consumers’ willingness to pay for value-added attributes. At low points in the cattle cycle, like this year’s historically small cattle herd, it puts at risk the value producers earn from sustained beef demand, and as the expansion phase of the cattle cycle begins it would undermine the benefits earned from growing beef demand.
“In response to consumer demands for value-added meat products like ‘no antibiotics ever,’ ‘grass-fed,’ or even someday ‘carbon neutral,’” said Potts, “AMAs have rewarded livestock producers for investing in these attributes while ensuring meat packers can make the high-quality products consumers want to feed their families.”
In addition, the Meat Institute believes the proposed change violates the “major questions doctrine,” as articulated in the Supreme Court’s ruling in West Virginia vs. Environmental Protection Agency, because the U.S. Department of Agriculture is acting without the permission of Congress and proposing administrative rules that will have a dramatic effect on all stakeholders in the meat and poultry markets.
“The President and his Administration continue to pursue policies that will increase costs for consumers. From Secretary Vilsack’s proposed changes to the Packers and Stockyards Act’s rules to USDA’s delayed modernization of pork inspection to EPA’s proposed wastewater guidelines, these policies will prove costly to the 98 percent of American households who purchase meat to feed their families,” said Potts.
SHARE OF THE CONSUMER DOLLAR
U.S. Secretary of Agriculture Tom Vilsack today said the share of the consumer dollar received by farmers and ranchers was dropping. In the beef market, the share of the consumer dollar is steady with the meat packer and processor receiving the smallest share.
BACKGROUND ON AMAS FOR CATTLE
The American beef market has modernized to allow producer driven innovations or AMAs. AMAs allow producers more flexibility in how to market their cattle, protect themselves against risk and earn better prices.
AMAs for fed cattle include forward contracts, formula pricing, negotiated grid trades, and packer-owned transfers.
A FEW EXAMPLES:
Forward Contracts - A cattle producer signs a contract with a feedlot operator. They agree that in six months, the producer will deliver 100 head of cattle at a fixed price of $1000.00 per head. When the delivery arrives at the lot, despite the current market price, the producer receives $1000.00 per head. This forward contract gives the producer certainty and provides the feedlot operator a stable supply at a fixed cost.
FORMULA PRICING
- A cattle producer enters a formula pricing arrangement with a small beef packer/processor. The formula determines the price based on the agreed criteria: price per pound for carcass weight. For higher quality grades like “Choice or Prime,” $.10 per pound. It could also include a penalty like $0.05 per pound for below grade carcasses. Formula pricing also provides potential premiums for other value-added production practices that align with consumer demand. When the cattle are delivered, the pricing is calculated based on the formula. This lets the producer be rewarded for investments in the herd like improved genetics and high-quality feed, provides risk management opportunities for the producer, and ensures the processor receives high quality cattle to meet demand. Ironically, USDA has invested significant resources in establishing a cattle market library to support this method of pricing.
THE LEGAL BACKGROUND: SHOWING “HARM TO COMPETITION” HAS BEEN UPHELD BY EIGHT DIFFERENT APPEALS
The eight federal courts of appeals that have considered the issue have unanimously concluded that a plaintiff must show actual or likely harm to competition to make a claim and win under Section 202(a) or (b) of the PSA.
The most recent circuit to address the issue, the Sixth Circuit, said it best:
The tide has now become a tidal wave, with the recent issuance of the Fifth Circuit Court of Appeals’ en banc decision in Wheeler v. Pilgrim’s Pride Corp., 591 F.3d 355 (5th Cir. 2009) (en banc), in which that court joined the ranks of all other federal appellate courts that have addressed this precise issue when it held that “the purpose of the Packers and Stockyards Act of 1921 is to protect competition and, therefore, only those practices that will likely affect competition adversely violate the Act.” Wheeler, 591 F.3d at 357. All told, seven circuits – the Fourth, Fifth, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits – have now weighed in on this issue, with unanimous results.
https://www.beaconmetals.com
CUSMA LAID THE GROUNDWORK FOR CANADA TO FEED HOUSE-BOUND AMERICANS
By Martha Roberts, Farm Credit
This is one in a series of posts covering Canada’s agrifood trade performance after the coming into force of three multilateral agreements with major global markets: the Comprehensive and Economic Trade Agreement (CETA) in 2017, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2018 and the Canada-United States-Mexico trade agreement (CUSMA) in 2020.
The importance of meat exports to overall Canadian trade performance is hard to overstate. In 2023, Canada exported $47.6 billion worth of food and beverages to 176 countries. Pork and beef accounted for 17% of total export values. They’re also subject to a wide array of tariff and non-tariff barriers, underscoring even more the significance of agreements that open access to global markets.
CUSMA HAS BEEN A BOOST TO MEAT AND NON-MEAT FOOD EXPORTS
Overall, CUSMA has been good for Canada’s food exports, with faster growth since the start of the pandemic when the deal came into force (Figure 1). The agreement allowed Canada to respond to the increased U.S. demand for foods used in home cooking during COVID. Last year, Canadian non-meat food exports reached 14.8 billion kilograms, growing, on average, 4.9% each year between 2020 and 2023. CUSMA, as NAFTA had before, has provided access for Canadian exports at a time of increasing demand, and has been particularly useful in exports of fats/oils.
FIGURE 1: Meat exports get much needed assistance since CUSMA came into force
Canadian meat exports to the U.S. and Mexico, while at much smaller volumes than non-meat exports, have grown more since 2020 than they had in the five prior years. In fact, meat exports to North American partners had been stable for years. Between 2020 and 2023, they grew 6.3%, on average, each year, with beef export growth dominating.
That perhaps shouldn’t be a surprise: U.S. pork production has outpaced demand for awhile, leading to the availability of ample domestic supplies at the same time that the country responds to low domestic beef supplies stemming from the smallest herd in 60 years.
There is reason to expect further growth this year considering strong demand from the still-buoyant U.S. and Mexican economies. Canadian exporters will, however, have to keep an eye on the potential for much weaker sales growth in 2025 amid an expected North American economic slowdown and a potential surge in protectionism in the aftermath of November’s U.S. elections.
HAS CETA FOUND A BOTTOM FOR CANADIAN MEAT EXPORTS TO THE EU?
The European Union is the largest developed market in the world by population, with high levels of disposable income and millions of consumers with a preference for high-quality food products. The signing of CETA established tariff rate quotas for red meat, giving Canadian farmers yearly duty-free access for up to 80,000 metric tonnes (MT) of pork (including consolidation of existing quota of approximately 6,000 MT) and 50,000 MT of beef exports per year. In 2017, Canada had been allowed just over 5,000 MT of pork and just under 3,300 MT of beef.
However, the once-bright promise of CETA to bolster Canadian meat exports seems to have faded (Figure 2). Prior to signing, Canadian meat exports to Europe were declining, falling a disappointing 22.4% each year, on average, between 2013 and 2017. In 2017, the year CETA was signed, meat exports to Europe totaled 3.7 million kilograms. By 2022, they had fallen 42.6% and were well below the allocated quota, largely due to more stringent EU regulations and increased aversion against growth hormones and vaccines in meat production.
FIGURE 2: Non-meat food exports to the EU grow asmeat exports fall
However, the pre- and post-CETA periods do show some reason for optimism. Between 2018 and 2022, our beef and pork exports continued to decline, but they did so at a slightly slower pace, averaging a 9.2% loss each year, compared with the 22.4% annual loss prior to signing. And in 2023, meat exports more than doubled in volume year-over-year to almost reach the volumes exported in 2019, perhaps a good tiding of things to come. European beef production was down 3.9% yearover-year in 2023 and another decline is forecasted for 2024, as their herds also shrink and Europe’s consumers increasingly turn to plant-based proteins.
Canadian exports of non-meat food products haven’t maintained their pre-CETA rates of growth since signing, but that growth has remained robust. Between 2013 and 2017, export volumes rose, on average, 7.0% each year. Between 2018 and 2022, they also rose, but on a reduced average of 4.7% each year. That was driven primarily by the tremendous increases in exports of fats/oils in 2020 and by growth in exports of coffee, milled products, sugar, cocoa and beverages throughout the pandemic.
While our overall food exports to Europe have increased over the last 10 years, it’s important to note that they are marked in millions of kilograms, compared to the billions of kilograms in which our CUSMA and CPTPP exports are measured. In part that’s because, although we don’t fulfill our allowable quotas, the EU’s potential to greatly increase Canadian exports may be overstated. Moreover, the recent shift to the right in European politics is more likely to raise trade barriers than lower them.
Asia is another lucrative market for Canada to develop. Canadian exports to CPTPP countries are heavily influenced by Japan, who is among Canada’s top three export markets for many ag commodities. In 2023, it was also Canada’s second-largest buyer of meat, behind the U.S. With a small land base and large population, Japan is a net ag and food importer; its wealthy consumers prefer access to high-quality, relatively higher priced goods – the kind that Canada provides. Most of the other signatories in the CPTPP are small importers of Canadian food, although some have grown quickly in recent years.
As a case in point, food exports to CPTPP countries were gaining traction prior to the agreement (Figure 3). Meat grew 6.6% and non-meat grew 7.5%, on average, each year between 2014 and 2018. Between 2019 and 2023, both rates slipped. Meat exports were stable in the next five years, but other food and beverage exports declined, on average, 3.9% each year.
CANADIAN TRADE WITH CPTPP PARTNERS EBBS AND FLOWS WITH OUR TRADE TO JAPAN
DF: I don’t think being on the island
FIGURE 3: Meat exports to Japan drive growth trends in food exports to CPTPP partners*
was the first in Atlantic Canada to be involved in the TESA program.
DF: Yes, I think we were the first farm east of Ontario as far as I understand.
I’m not sure why the eastern associations wouldn’t have previously nominated anybody because there are many farms here on PEI doing every bit as much as we are as to attain a high level of sustainability. Anyway, we were very surprised when the PEI Cattleman’s Association nominated our farm.
CMB: And then you were attending the Canadian Beef conference in Calgary and you won.
Japanese import volumes were the principal driver of those trends. Japan’s growth in importing Canadian red meat averaged over 8% each year between 2014 and 2018, but that trend reversed postCPTPP, falling 4.4% each year, on average, between 2019 and 2023. Over that same 10-year period, meat volumes took up more room amongst all food exports to Japan, rising from 31.3% of total exports in 2013 to 43.4% of total exports in 2023.
DF: Yeah! That was a very nice moment
CMB: So now that you have been recognized, do you think that will draw more attention and garner more nominations out of Atlantic Canada going forward?
DF: Absolutely. We’ve gotten a lot of good press highlighting the island cattle industry. I’m positive you’ll see more farms in our neck of the woods nominated next year. And I have to give the Canadian Cattleman’s Association recognition for choosing a farm from Prince Edward Island. We are small players in the national beef industry and I think it was a real credit to their organization to recognize us. They treated all the nominees royally and it was a real class act. It was a wonderful experience.
While Chile and Mexico are signatories to the CPTPP, Canada had prior access to each: Mexico thanks to NAFTA/CUSMA and Chile, with whom we share a bilateral trade agreement. Looking ahead, the region offers opportunities and challenges for Canadian exporters. A growing middle class in CPTPP developing economies raises food demand. But geopolitical instability arising from numerous global conflicts is expected to put a damper on overall trade by making it more expensive to source materials and ship goods, which will impact many economies in Asia-Pacific. That may be especially true for Japan, which is expected to see weak growth in 2024 and 2025, while continuing to suffer from an aging population, high debt levels and the possibility of a weakening yen.
https://www.yesgroiup.ca
GOVERNMENT ANNOUNCES SUPPORT FOR CANADIAN BEEF EXPORT MARKET
Lawrence MacAulay, Minister of Agriculture and AgriFood has announced an investment of more than $6 million in two beef and cattle organizations through the AgriMarketing Program, an initiative under the Sustainable Canadian Agricultural Partnership.
The investment aims to drive the growth of Canada’s beef industry through promotional activities that increase awareness and demand for Canadian beef in existing and new markets.
“Canadian beef has earned a top spot on the world stage because of the commitment to quality and sustainability that our producers hold themselves to. By continuing to promote Canadian beef in key foreign markets, we can make the sector more competitive, put more money in the pockets of producers, and drive demand for our world-class Canadian beef,” stated Minister MacAulay.
Canada Beef is receiving up to $5,865,110 and the Canadian Cattle Association is receiving up to $453,364. The two projects incorporate promotional activities such as advertising campaigns, incoming and outgoing trade missions, technical training, and educational seminars.
“Canadian beef is a world-class product, and this funding will support initiatives that increase awareness of the value proposition of Canadian beef and veal exports in international markets vital to the success of Canada’s beef industry,” stated Eric Bienvenue, President of Canada Beef.
Increasing trade in foreign markets will boost economic activity in Canada and positively impact farmers and businesses at all levels of the supply chain.
• The value of Canadian beef exports has increased in recent years. From 2018 to 2022, the value increased from $2.7 billion to $4.7 billion, and, in 2023, the value of Canadian beef exports exceeded $5 billion.
• In 2023, the top importing countries for Canadian beef included the United States ($4B), Japan ($351M), Mexico ($284M), South Korea ($122M), and Vietnam ($79M).
NEW SURREY SLAUGHTERHOUSE ‘WOULD
Nathan Phinney, President of the Canadian Cattle Association, said “Expanding and opening markets abroad for Canadian beef to meet global demand requires proactive efforts to build relationships. These local, national and international relationships open doors to trade and collaboration, and the AgriMarketing program support will help to ensure Canadian beef producers are represented at these global tables.”
MARKETS
• The Sustainable Canadian Agricultural Partnership (Sustainable CAP) is a $3.5-billion, 5-year agreement (April 1, 2023 to March 31, 2028), between the federal, provincial and territorial governments to strengthen the competitiveness, innovation, and resiliency of the agriculture, agri-food and agri-based products sector.
Proposed 30,000-square-foot beef abattoir in Cloverdale would be B.C.’s largest such facility
By Amy Reid, Peace Arch News
A federally licensed beef processing facility is in the works in Surrey, BC.
“There’s a new building coming forward, a new abattoir, I think that’s the French pronunciation of slaughterhouse,”
so as to not emit odours. And while there is an operational 6,000-square-foot abattoir on the property now, it’s can only process a limited number of cattle.
the ability to not have to ship an animal to Alberta to have
Agricultural and Food Sustainability Advisory Committee.”
would process up
• The AgriMarketing Program is one of the federal programs under the Sustainable CAP and was established to help industry increase and diversify exports to international markets and seize domestic market opportunities through industry-led promotional activities that differentiate Canadian products and producers, and leverage Canada’s reputation for highquality and safe food.
Chris Les is general manager of Meadow Valley Meats, the company behind the project. Meadow Valley Meats is seeking a Canadian Food Inspection Agency license for the proposed abattoir, to become a federally registered meat establishment and expand the operation. This would allow the meat products to be transported beyond B.C.’s boundaries.
• Canada recently opened an Indo-Pacific Agriculture and Agri-Food Office (IPAAO) in Manila, Philippines. The IPAAO will enhance market access, advance technical cooperation, identify new business opportunities for Canadian exporters to diversify their exports, and support investment attraction efforts into Canada.
“Our focus is on trying to bring a more efficient, sustainable local product to the market, realizing we can do that now in a very limited sense,” said Les. “I caution people when talking to them and they say, ‘What a big plant, that’s going to go allow you to go mainstream.’ Well, yes, if you look in the context of B.C., but this is still a very niche plant and we’ll serve a niche industry for producers and for the market. It’s certainly not going to be a monstrosity of a plant but it’ll be a big upgrade from the site currently.”
Agricultural Land Reserve at 5175 184th St. The planned 30,000-square foot abattoir in Cloverdale
small by industry standards, compared to the largest meat
The proposed facility would be fully enclosed and designed
MCDONALD’S SAYS BEYOND MEAT BURGER TEST FAILED
By Geoffrey Seiler, The Motley
It’s been a difficult few years for Beyond Meat’s stock, which is down 96% over the past five years, including falling 23% year to date.
The company recently received more negative headlines when McDonald’s discussed how two test markets using its plant-based burgers had failed.
Let’s take a closer look at the news, the issues the company has been facing, and what investors should do with the stock.
A LACK OF DEMAND
McDonald’s recently came out and said that its test of the McPlant burger, which used patties from Beyond Meat, had failed in its test markets. The plant-based burgers were being served in about 600 locations in the San Francisco and Dallas-Fort Worth markets. However, the news is more about the headlines, as the fastfood giant was testing the burgers back in 2022. The company noted that there just was not much demand for the burger, even in a more vegetarian market like San Francisco.
While the news will not have any impact on Beyond Meat’s sales going forward, it does speak directly to one of the company’s biggest problems: Demand for its products is shrinking.
This could be seen in its most-recent quarterly results, where volume of Beyond Meat’s products sold fell 16% to 16.57 million pounds. The company sales volumes declined across its segments, with U.S. retail volumes down 10% to 7.47 million pounds and U.S. food service volumes sinking nearly 21% to 2.20 million pounds.
While the U.S. market has been a continued struggle for Beyond Meat for quite some time, the company has done much better internationally, especially in the food service part of its business. For example, international food service volumes climbed nearly 60% last year, while sales rose 34%.
However, that strong performance evaporated in Q1. In the first quarter, international food service sales volumes plummeted 25% to 4.16 million pounds. International retail sales volumes, meanwhile, fell 13% to 2.91 million pounds.
Besides declining demand for its products, Beyond Meat also has a pricing and margin problem as well. While sales volumes have been declining, revenue in dollar terms has fallen even more. In Q1, while overall volumes fell 16%, dollar-based revenue fell even more by 18%. Last year, meanwhile, while volumes dropped 8%, revenue plunged 18%.
Gross margins have been very low. In Q1, they were a paltry 4.9%. With declining volumes and sales, the company is seeing operating deleverage in its business.
DEBT IS COMING DUE IN 2027
Not surprisingly, the company is burning cash as well. In Q1, it had operating cash flow of -$31.8 million, while it was -$107.8 million in 2023. It also has an outstanding convertible note of over $1.1 billion that, while sporting an attractive 0% interest rate, will likely need to be settled in cash come March 2027.
Given the current state of the company’s operations, being able to refinance that debt seems unlikely. As such, the need to seek bankruptcy protection within a few years is a real possibility unless the company can change its fortunes.
The company is currently using an at-the-market (ATM) program to raise cash through the sale of its stock. This is diluting shareholders while trying to raise enough cash to eventually try and settle the principal amount of that note.
Thus, while the McDonald’s news may not exactly be fresh, it certainly can be seen as a reflection of Beyond Meat’s struggles. Meanwhile, there are bigger issues ahead, with Beyond Meat’s international market turning negative and a lot of debt coming due in a few years.
Article courtesy of Motley Fool - https://www.fool.ca/
CARGILL WORKERS END STRIKE AT GUELPH PLANT
The 960 unionized employees at Cargill Dunlop in Guelph have ratified a new collective agreement after 41 days on the picket line. The workers, represented by Local 175 of the United Food & Commercial Workers (UFCW), began strike action after turning down a deal on May 26, 2024.
“In our union, the power is in the hands of our members through their democratic vote, and the members at Cargill Dunlop used their vote to make their voices heard,” said Kelly Tosato, President of UFCW Local 175.
“It is a tough decision to go on strike and it can be an even more difficult decision to end a strike. But these members took a stand against a huge corporation and they should be proud of their strength and courage.”
The new agreement for Cargill Dunlop workers contains wage increases, benefit improvements, and more.
* This agreement contains wage increases totalling $3.75 per hour over the course of the agreement, which includes $2 per hour in the first year. That $2 will be paid retroactive for all hours worked, including overtime, since January 1, 2024. In addition, members receive a contract renewal incentive payment in the form of a $500 lump sum.
* Dental coverage improves to $2,000 per year, and members also benefit from the removal of lifetime caps on a number of dental services. Short Term Disability (STD) now has a maximum of 70% and will provide up to $143 more per week. This means members can receive up to $668 per week while on STD leave.
* Bereavement leave entitlement for members will now be five days, up from four, for the death of a spouse, child, or parent.
In a statement, a Cargill spokesperson said: “Cargill is pleased to have reached an agreement with the union that our Guelph employees have ratified. The agreement, which is comprehensive, fair and market competitive, reflects the critical role they play in feeding families across Canada. We believe this positive outcome is in the best interests of our employees, customers and producers and are eager to move forward to build a stronger future, together.”
The nearly 1,000 members of UFCW Local 175 at the Cargill Dunlop plant took to the picket lines on May 27, 2024, after rejecting a previously negotiated settlement by 82%. The strike vote, held in April, had 99% support from the members.
With approximately 1,500 head of cattle processed every day at Cargill Dunlop, the members of UFCW Local 175 in the facility are an integral part of the food supply chain in Ontario and beyond.
A GUIDE TO DRY AGING CABINETS
By Scott Leger
Meat manufacturers and butchers have perfected their processes and cuts over centuries, expanding their capabilities alongside technological advancements.
Commercial refrigeration was a key piece of equipment that helped butchers grow operations and profitability. With the capacity to store fresh meat for a longer period, meat businesses could reach more customers while ensuring a high level of quality.
However, another piece of equipment has emerged as a game-changer for enhancing the flavor of meat over time: dry aging cabinets. Combining the history of meat preservation with modern innovation, this equipment has rightfully piqued the interests of meat businesses nationwide.
WHAT IS DRY AGING?
Dry aging is a technique aimed at enhancing the texture and flavor of beef and other meats by breaking down tough muscle fibers, connective tissues, and reducing moisture content. This method requires careful steps to achieve desirable results that are safe for consumption.
When executed properly, the natural enzymes present in the meat work to tenderize the muscle fibers and connective tissue, leading to a significantly more tender product. The aging process also results in moisture loss, concentrating the flavor and developing rich, beefy, nutty, and cheese-like aromas over time.
The duration of dry aging can vary, with a minimum of 14 days recommended to initiate the breakdown process. However, noticeable differences in texture and flavor typically become apparent after 21 days, and some chefs extend the aging period up to 120 days, with 30 to 45 days being a common choice for a balanced flavor profile. Additionally, the meat's breed, diet, and age at slaughter can influence the outcome of dry aging.
ESSENTIALS TO PROPER DRY AGING
Dry aging isn’t easily accomplished without the right conditions or equipment. A dry aging cabinet creates the ideal environment for this process to take place. Here are some essential factors that curate the unique dry aging process:
1. MEAT PREP AND TIME FRAME
Dry-aged meat requires a longer prep time due to the aging process, which usually ranges from a few weeks to several months, to achieve the desirable flavor and tenderness profile. I recommend recording the pre-dryaged weight to see how much is lost during the process of dry aging, which lets you make informed pricing decisions.
For strip loins, you can expect 15-20% moisture loss after about 45 days and about half a centimeter of crust to trim. Again, there may be a lot of dependencies on various elements involved, so make sure to factor in variables such as meat type, cut, breed, etc. Once you have your meat aged to perfection, it can then be seared to preference or even vacuum-sealed and frozen to be cooked at a later date or sold to customers.
2. AIRFLOW, STERILIZATION AND TEMPERATURE
During the dry aging process, airflow and sterilization are key to ensuring proper ventilation and avoiding mold growth. The right equipment will allow consistent airflow during dry aging, while appropriate air sterilization technology prevents any unwanted moisture build-up.
Additionally, while you may think dry aging equates to heat, the meat must actually be kept at a cooler temperature to stop spoilage and maintain food safety standards, just like during refrigeration. Large cuts of meat should be kept at temperatures around 34°F to 39°F throughout the dry-aging process.
LEADING DRY AGING BRANDS
Not every dry-aging cabinet is built the same way. However, we know testing multiple equipment of this caliber can be costly. Below is a comparison chart that highlights the main features of popular dry ager brands including Stagionello, Primeat and Dry Ager.
Aesthetics-wise, the Stagionello Cabinet is known for its advanced features, including large glass windows on multiple sides, customizable LED lighting, and a userfriendly Climatouch® interface for easy pH calibration. It boasts automatic internal lighting, height-adjustable legs, a dehumidifier, optional air exchange, a heated frame, hot gas defrost, and an industrial refrigeration unit. Its standout feature is the built-in pH control, allowing safe, dry aging up to 300 days, and its patented technology.
Primeat, also from Italy, offers reliable ventilation and dehumidification systems that maintain optimal
humidity levels, negating the need for salt blocks and ensuring safe meat storage. Whereas, Dry Ager excels in precision-controlled aging chambers that enhance meat flavor and tenderness through optimal enzymatic breakdown conditions, making it a preferred choice for high-quality, flavorful meats. Each brand has competitive options for a myriad of dry aging needs, so it is important to consider the factors that are most important to you and your business needs.
EFFECTS ON MEAT COMPARED TO REFRIGERATION
We know refrigeration helps slow down the deterioration of meat by inhibiting bacterial growth but does not significantly alter its flavor or tenderness. If anything, meat left in the fridge can dry out faster, leading to a tougher cut. By taking the extra step of dry-aging meat through the enzymatic breakdown of muscle fibers, the result is increased tenderness, the concentration of flavor, and the development of unique nutty and umami notes in the meat. All-in-all, if you are looking to offer something different to family, friends or customers, dry aging may be what you are looking for.
IN SUMMARY
Dry aging offers a specialized method to enhance the flavor and tenderness of beef through controlled aging, albeit at a higher cost and with longer processing times. Whether you add this equipment to your commercial meat business stack depends on factors such as budget and desired flavor profile sought after by your target market.
A dry ager can’t replace the need for commercial refrigeration in your meat business, but it definitely can complement other offerings and demonstrate your commitment to keeping up with available innovations. Many consumers and restaurant owners seek out unique meat products for special occasions, and as “foodie” culture continues to be popular, the niche of dry-aged meats can be lucrative for any meat business willing to invest in this equipment.
ABOUT THE AUTHOR
Scott Leger is a corporate chef at Omcan and a consulting expert at Zanduco, a prominent e-commerce platform in the food equipment and services sector. He started his career as a chef at a renowned restaurant chain and has over a decade of experience in the culinary sector with well-known foodservice brands. Scott has worked with brands such as Pacojet, Pizzagroup, Stagionello etc. and offers incisive insights for the restaurant industry.
DROUGHT IN THE WEST
How to improve our resilience in the face of climate change?
“Despite improved moisture conditions across much of Western Canada much of the region remains vulnerable to degrading drought conditions if sustained moisture is not received,” according to the national agroclimate report. This is a sobering outlook as severe droughts continue to hit Western Canada, disrupting farm operations. According to the OECD, climate change is expected to increase the intensity and frequency of these weather-related shocks. Given the heightened risks to agriculture, this prompts us to ask, what measures have farmers implemented to strengthen the resilience of their operations? How does our policy framework support producers and fortify Canada's food supply resilience?
Building resilience means the ability to plan and prepare for, absorb, recover from, and adapt to adverse events. For sectors such as agriculture it’s crucial to enhance resilience continuously. Adverse events will not only impact producers’ bottom lines and livelihoods, but it will ultimately pose a threat to our food supply. For instance, during a drought, the lack of water can lead to decreased production of water-dependent crops, such as potatoes, and force farmers to sell off cattle due to a lack of grass and forage needed for grazing.
These consequences come at a high cost. According to Aquamics, total output losses due to drought, flood, and storms between 2022 and 2050 are expected to amount to $3 billion for Canadian agriculture. This is a substantial loss for Canada, and policy frameworks should support producers’ resilience, by better adapting Business Risk Management (BRM) programs to small agri-businesses and minimizing economic loss.
There is no secret recipe for a resilient agriculture sector. It is important to strike a balance between proactive measures designed to build long-term resilience, and reactive measures triggered after a natural disaster.
Farmers have been proactive in building long-term on-farm resilience. For example, many of them are diversifying crops to enhance soil health and mitigate exposure to pests and diseases.
Additionally, when an adverse event like drought strikes, producers implement measures to mitigate and absorb their impacts. No-till seeding is an example of a reactive measure put in place by producers to mitigate the impacts of a drought. This practice conserves moisture and protects soil from wind erosion by placing seed and fertilizer with minimal soil disturbance. While producers do their best to strengthen the resilience of their farms, policymakers need to help agri-businesses adapt.
A way policymakers can support producers’ long-term resilience is by stimulating innovation. As such, the government offers programs that provide financial support for the adoption of innovations that increase agriculture’s competitiveness, sustainability and resilience in the long term, like the Agri-Innovate program.
In the event of adverse climatic events, the government also has programs in place to help farmers absorb and recover from natural disasters such as drought. For instance, Agri-Stability is a margin-based business risk management program that supports producers in years of significant income declines. This program aims to ensure farming activities can quickly resume after a disaster.
While those programs are positive strides from the government, they could be improved to better support small producers in building their resilience. For instance, according to a Canadian Federation of Independent Business survey, while Agri-Stability is the most used BRM program, it has a low satisfaction level, with only half of its users expressing satisfaction. The program has a frustratingly slow rollout, often becoming useless due to delays. One business owner reported receiving their Agri-stability payment in 2021 for a drought that hit in 2019…
Furthermore, programs like Agri-Innovate are rarely designed for small farms that run with small margins. Especially with rising prices, not all small agribusinesses have the initial cash flow necessary to invest in those modern technologies. They should nonetheless have the opportunity to adopt these new technologies which will improve their long-term resilience and adaptation to increasing risks.
Building resilience is not achieved overnight. But resilience is deeply rooted in farmers’ DNA, provided government policies support them and are tailored to all sizes of business.
Not a member? JOIN CFIB today for more help and information
Juliette Nicolaÿ is a Bilingual Policy Analyst for the Canadian Federation of Independent Business (CFIB). CFIB is Canada’s largest association of small and medium-sized businesses with 97,000 members (4,500 agri-business members) across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca
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