Alberta is launching a compensation program for cattle farmers and ranchers who are being affected by a backlog in the processing system due to COVID-19.
Under the fed cattle set-aside program, announced Thursday by Premier Jason Kenney, farmers will be allowed to hold cattle for up to nine weeks, in an effort to allow supply to better match demand.
“We know that farmers have been seriously affected by the global economic crisis,” Kenney said. “And more particularly, the livestock industry both here in Alberta and across Canada have been affected by the impaired operations of many meatpacking and food processing plants across the country. This has resulted in a significant backup, particularly of cattle.”
A per head payment, to compensate farmers for feeding costs, will be given to holders of the 130,000 cattle that are backed up. The estimated timeframe for clearing the backlog is about 30 weeks.
The majority of all Canadian-raised cattle are slaughtered and processed by plants owned by Cargill Inc. and JBS SA. The Cargill plant in High River and the JBS plant in Brooks first reported cases of COVID-19 in April.
Cargill temporarily shut down on April 20 for two weeks because of the outbreak.
Kenney said 826 of the reported 944 COVID-19 cases at the Cargill plant have recovered as well as 466 of the 583 cases at JBS.
Agriculture Minister Devin Dreeshen said the backlog has caused cattle prices to drop but he hopes the new program will bring some stability.
“We are in talks with Saskatchewan and Manitoba to be able to administer this program for them as well,” he said.
The program is a joint 60/40 venture between the federal government and provinces. Alberta is footing the bill for $17 million of the expected $42-million cost.
Alberta produced roughly 40.5 per cent of the total of cattle and calves in Canada in 2018, making beef the province’s second-largest agriculture food export at $2 billion.
The province is also increasing the interim payment for the hog sector from 50 per cent to 75 per cent, which works out to be $20 per head of pork, through the risk management program AgriStability. The provincially-run program protects farms against large declines that threaten their viability.
Livestock isn’t the only agriculture sector being impacted by processing backlogs. Demand for potatoes has plummeted since restaurants have closed their doors, resulting in a massive oversupply.
In response, advance payments for potato producers will be going up from 50 per cent to 75 per cent.
Meanwhile, the province is looking to take advantage of the federal government’s $50-million buyback program for surplus foods.
The program, part of a total $252-million government investment in agriculture announced by Prime Minister Justin Trudeau on Tuesday, will help redistribute existing and unsold inventories of products such as potatoes and poultry, both of which have suffered a collapse in demand due to the pandemic.
Dreeshen said the province is working with potato producers and the federal government to work out Alberta’s share.
— With files from Amanda Stephenson and Jake Edmiston