Canadian Cattlemen’s Association
The Canadian Cattlemen’s Association (CCA) welcomed a move by Cargill to bring in water filtration systems to help the Cargill beef processing facility in High River, Alberta, return to operations. The facility reduced and then ceased processing beef last week due to a lack of fresh water supply following the floods in Southern Alberta that devastated High River. The water filtration system may help the company produce the potable water it needs to resume operations.
The plant processes about 40 per cent of Western Canadian capacity and employs about 2,000 people. Returning the facility to full operations as quickly as possible is the best way to minimize the impact of the closure on Cargill staff as well as producers with market-ready cattle. Alberta Premier Alison Redford and Agriculture Minister Verlyn Olson were at the plant Thursday to announce that the Government of Alberta has provided the pump and irrigation piping to bring the filtration systems on-line. The province said it will also work with Cargill to expedite all necessary approvals in an effort to get the plant back up and running. This effort runs parallel to ongoing work to restore water service to the Town of High River, where water and sewer treatment facilities are operational on a limited basis.
There is no indication when the plant may resume processing beef. The potential market impacts from Cargill High River not having access to fresh water will depend on a number of factors. If closed less than 10 days, impacts would be expected to be minimal as feedlots are very current right now. This may also depend on the ability of other plants to ramp up production by adding an extra day a week.
If closed longer, the basis will widen, potentially back to what was seen last October when the Lakeside plant was temporarily closed. The longer the plant is closed, alternatives will need to be looked at south of the border, particularly as feedlots make efforts to stay current.
Disruptions for cattle on specific feeding programs, and as cattle are fed to heavier weights will add costs to the feedlots in addition to the lower prices. This could potentially pressure feeder prices, but July is one of the slowest months for feeder trade.
Cows could also see pressure, but July is also a slow month for marketing cows.
The CCA is in regular contact with Cargill and is working in support of their activities to normalize their operations as quickly as possible.