Within days of government’s shelter in place orders, there were ridiculous scenes of people fighting over toilet paper along with empty shelves in some other areas of grocery stores, including the fresh meat section. It was an eye-opener of what could come. With the food supply chains facing unprecedented pressures caused by Covid-19, governments have been assuring citizens that there are no food shortages and there is no need to hoard or panic buy.
After the weeks of the ongoing Covid-19 disaster there are cracks showing in the world’s ability to keep all of its citizens fed. Overseas there have already been scenes of hungry people looting food trucks. On April 28th, there were street riots in Lebanon over food price increases.
A food truck gets looted by desperate people near Cape Town, South Africa
A healthy food supply chain relies on predictability
In 2015 the Group of 20 (G20), held a conference to address “…food waste and loss – a major global problem…”. It was a much simpler time. The world-wide food supply chain did not have to deal with a very contagious and complicated coronavirus.
When working properly, a country’s food distribution is a marvel of efficiently and logistics. Delivering massive amounts of fresh food to consumers to every corner of the country, every day. But a chain is only as strong as its weakest link.
“It’s something we don’t like doing, no dairy farmer likes doing it. There are just some real limitations in our supply chain right now.” Karlee Conway with Alberta Milk
There are some scenarios happening in North America that have to be an eye-opener for everyone. Food rotting in the fields, whole crops getting ploughed under, fresh milk getting poured down the drain. The milk dumping is also happening in Canada. Karlee Conway with Alberta Milk said that many farmers are forced to make a difficult decision.
“It’s something we don’t like doing, no dairy farmer likes doing it. There are just some real limitations in our supply chain right now.”
And even more shocking, meat and egg producers in North America have already started culling their animals. A lack of buyers and the closing of processing plants due to sickness and even death of employees.
He and she nailed it
Agriculture Minister Devin Dreeshen said this on March 27:
“Alberta does not have a food supply shortage, but the entire national supply chain should be declared an essential service. There are a lot of moving parts to get food to market and onto kitchen tables. Alberta’s supply chain is responding well, but it is not business as usual.”
Many things have changed since then. Elaine Power, a food security expert at Queen’s University, is more blunt, saying the coronavirus pandemic is exposing “critical weaknesses” in various vital networks, including health care systems and food supply chains. “The people who are already food insecure, that’s only going to get worse. The type of resources that people would normally draw on probably aren’t going to be there.”
Beef ready for sale at a grocery store. Will prices go up? Will there be shortages?
Daily press briefing on April 21st
Prime Minister Justin Trudeau said in regard to the Cargill beef processing plant closing and another major Alberta plant’s production reduction after staff contracting Covid-19:
“We are not at this point anticipating shortages of beef, but prices might go up. We will of course be monitoring that very, very carefully.”
“We stress the importance of avoiding food losses”
On the same day the Prime Minister talked about the Alberta meat processing plants, the G20’s Agriculture and food ministers held an emergency meeting. The G20 makes up more than 80% of the world’s Gross Domestic Product (GDP). At this virtual meeting, the countries agreed to the following:
“Any emergency measures to contain the spread of the COVID-19 pandemic must not create unnecessary barriers to trade or disruption to global food supply chains.” And that, “Under the current challenging circumstances, we stress the importance of avoiding food losses and waste caused by disruptions throughout food supply chains, which could exacerbate food insecurity and nutrition risks and economic loss.”
Easy to say, much harder to do
Just in North America, if the past 5 weeks alone was a test on the G20’s agreed to statement, an “F” has been earned so far.
Our food system is distributed into two main streams; the large bulk volume packaging going to the food service areas and the smaller personal size portions going to consumer stores.
When the full stop happened, restaurants, hotels, schools and the majority of bulk orders stopped. Regular expedited weekly sales were sent to the grocery stores, leaving massive amount of unsold produce in the fields.
Gene McAvoy photo of a farmer plowing under rip tomato plant fields has upset viewers on Facebook.
“On March 24th, everything changed, from brokers the orders stopped, everything got quiet. The 25th, (was) super-quiet. Producers were blindsided. Since then tomato (sale) volumes are down 85%, green beans 50%, cabbage is (down about) 50%.”
And it is not just those crop. It’s onions, squash, lettuce and more.
Images of wasted produce and food lines
Without the regular food service industry orders, Florida farmer Paul Allen, in the just first week of April, plowed under more than six million pounds of green beans and cabbages back into his fields. He was far from the only farmer to do this. Allen explains,
“Four million people in the winter season eat lavishly three times a day on cruises from Miami alone. And 120 million tourists per year go to theme parks.”
His sales died up overnight.
Scene of milk dumping in the upstate. made New York Governor to say STOP!
This has lead to hundreds of millions of kilograms and billions of dollars’ worth of life sustaining, nutritious, fresh produce and milk has ended up as rotting waste and dumped down the drain. While, at the same time there were images of thousands of people line up for a food donation.
Countless food banks would gladly take and distribute this lost food. But the food supply system we know is one that is protected, regulated, and inspected. The last few weeks shows that in a world-wide emergency, the system has a few weak links.
On April 27th, after seeing images of milk waste, New York Governor Andrew Cuomo tweeted that he was stepping in to stop the milk dumping, asking that “…dairy producers use the excess milk to make yogurt and cheese that will be distributed to food banks & those in need.”
United Nations warns of famines of ‘biblical proportions’
It’s not just in North America. Problems are showing up around the world. In India, cows are being fed strawberries to get some use out of crops.
The United Nations Food and Agriculture Organization has reported the ‘Hammer Blow’ from the corona virus could by the end of 2020, double the amount of people facing actuate food insecurity to 265 million, up from 130 million in 2019. These numbers lead the UN to warn of the possibility of famines of ‘biblical proportions’ across as many as ‘three dozen countries’.
This kind of pending suffering will be hard to stop when the richest and most generous countries in the world are having their own food supply issues, while taking such a massive hit to their economies.
Spring is the start of Alberta’s growing season
In Alberta, the government has already made a plea for workers to fill as many of the 70,000 jobs in the food supply system. Jobs that are usually filled by temporary foreign workers, another program affected by the pandemic. With the planting season upon us, farmers are deciding how much and what to plant in 2020.
Meat production is a major part of Alberta’s economy
Meat production and processing in Alberta is vital to Canada’s supply of food. The three main beef plants in the province, Cargill in High River, JBS Canada in Brooks and Harmony Beef Company in Balzac, have all had Covid-19 problems. While a lot of the final meat processing can and is completed in production facilities and butcher shops across the country, these three main plants are responsible for 75-80% of the federally-inspected slaughter of the cattle for all of Canada.
Cargill’s High River plant
Meat processing employees work in close quarters, side-by-side on fast moving assembly lines. With this very contagious virus, it has spread through the workforce. At least 759 workers have tested positive for Covid-19 at the Cargill meat processing plant in High River, which has a workforce of 2,000. There are another 408+ people in the community that have tested positive for Covid-19, making this the largest outbreak linked to a single site in Canada. The Cargill plant is now temporarily closed.
At least 276 workers have also tested positive for Covid-19 at the JBS Food Canada beef processing plant in Brooks, with the community itself having over 760 cases. The plant is now down to one shift.
While Alberta and the Canadian governments work together to increase the number of meat inspectors available, Fabian Murphy, president of the Agriculture Union that represents the federal meat inspectors wants safety guarantees. Seven inspectors have already tested positive for the virus at the Cargill plant. Murphy has also stated that it’s only a matter of time before JBS plant in Brooks is also forced to temporarily halt production, stating that a, “14-day shutdown would allow all employees to self-isolate. After (that) production at the facility could resume.”
Pork producers are also under great pressures
The Canadian pork industry across western Canada is under extreme pressure, being called “the worst scenario seen in decades.” Faced with dropping prices for their finished hogs, no buyers for their piglets for finishing and growing backlogs in processing, the concern now is how many family pork farms will go under before this is over?
Production lines in Western Canada plants have been slowed down for better safety for workers. Add to that, US pork processing plants closing because of widespread Covid-19 outbreaks with their workers. Currently there has been a 25% reduction in pork slaughter capacity south of the border. Both the Canadian and the US pork industry producer have warned of large amounts of animals will have to be culled. And it has already started in small scales with larger culls within the next weeks.
Chicken producers are facing the same issues
Chicken producers are also facing the same issues. Sofina Foods Inc., that runs a Lilydale chicken processing plant in Calgary confirmed that one employee tested positive for COVID-19 and is in self-isolation. As well, doctors are investigating two possible cases of COVID-19 found in workers at Mountain View Poultry, near the Town of Okotoks.
British Columbia has at least two chicken processing plants with confirmed growing Covid-19 cases. One plant has temporary closed.
The talk of major animal culls, is not just talk
John Tyson, chairman of Tyson Foods, the world’s second largest processor and marketer of chicken, beef, and pork had very strong comments in a full-page ad published in The New York Times, Washington Post and Arkansas Democrat-Gazette. In part Tyson’s top person said bluntly:
“The food supply chain is breaking. Meat processing plants across the US are closing due to the pandemic. US farmers don’t have anywhere to sell their livestock. Millions of pigs, chickens and cattle will be euthanized because of slaughterhouse closures, limiting supplies at grocers.”
With published reports, the animal culling has already began. One Prince Edward Island farm euthanized market ready hogs and then dumped them in a landfill. Iowa farmer, Al Van Beek said, “What are we going to do?” after ordering 7,500 piglets to be aborted. Daybreak Foods Inc., based in Lake Mills, Wisconsin has used carts and tanks of carbon dioxide to euthanize tens of thousands of healthy egg-laying hens. Eggs are no longer being bought by their customers in the restaurants and food-service business.
USDA sets up “Coordination Centre” to “assist on depopulation”
The U.S. Department of Agriculture (USDA) has posted online:
“The USDA’s Animal and Plant Health Inspection Service (APHIS) is establishing a National Incident Coordination Center to provide direct support to producers whose animals cannot move to market as a result of processing plant closures due to COVID-19. Going forward, APHIS Coordination Center, State Veterinarians, and other state officials will be assisting to help identify potential alternative markets if a producer is unable to move animals, and if necessary, advise and assist on depopulation and disposal methods.”
“We stress the importance of avoiding food losses and waste caused by disruptions throughout food supply chains, which could exacerbate food insecurity and nutrition risks and economic loss.” April 21st G20 agreement.
If the G20 matters, North America, gets an “F” so far
The stress on the food supply chain continues to grow the longer Covid-19 lasts. On April 28th Meat producer JBS said it was reopening a Minnesota pork plant, that was shuttered by the pandemic to euthanize up to 13,000 pigs a day for farmers, not to produce meat for consumers.
Governments must get a handle on the cull of livestock and the billions of dollars of rotting produce meant to go to our populations. There are thousands of people that are hungry. The use of Food Banks in North America has hit new records, with more people needing help every day. But at the same time billions of dollars of food is being destroyed.
What’s wrong with the picture? It is just wrong; the USDA has set-up a Coordination Center to help farmer either sell their products or help kill and dispose of the carcasses in mass. All this, while people go hungry in the same country during a pandemic.
Governments need to step in and redirect this food from a landfill to population that needs it. Until this happens, the links in our food supply chain will continue to be stressed. Food for thought.
A farm tractor is silhouetted against a setting sun near Mossbank, Saskatchewan, Saturday May 11, 2002. (THE CANADIAN PRESS / Adrian Wyld)
Ending Canada’s dairy supply management system would lower costs, boost exports, and create greater economic opportunities.
The Trump administration’s trade warfare is not all bad. Aside from spurring overdue interprovincial trade barrier elimination and the removal of obstacles to energy corridors, it has also spotlighted Canada’s dairy supply management system.
The existing marketing board structure is a major hindrance to Canada’s efforts to increase non-U.S. trade and improve its dismal productivity growth rate—crucial to reviving stagnant living standards. Ending it would lower consumer costs, make dairy farming more dynamic, innovative and export-oriented, and create opportunities for overseas trade deals.
Politicians sold supply management to Canadians to ensure affordable milk and dairy products for consumers without costing taxpayers anything—while avoiding unsightly dumping surplus milk or sudden price spikes. While the government has not paid dairy farmers directly, consumers have paid more at the supermarket than their U.S. neighbours for decades.
An October 2023 C.D. Howe Institute analysis showed that, over five years, the Canadian price for four litres of partly skimmed milk generally exceeded the U.S. price (converted to Canadian dollars) by more than a dollar, sometimes significantly more, and rarely less.
A 2014 study conducted by the University of Manitoba, published in 2015, found that lower-income households bore an extra burden of 2.3 per cent of their income above the estimated cost for free-market-determined dairy and poultry products (i.e., vs. non-supply management), amounting to $339 in 2014 dollars ($435 in current dollars). Higher-income households paid an additional 0.5 per cent of their income, or $554 annually in 2014 dollars ($712 today).
One of the pillars of the current system is production control, enforced by production quotas for every dairy farm. These quotas only gradually rise annually, despite abundant production capacity. As a result, millions of litres of milk are dumped in some years, according to a 2022 article by the Montreal Economic Institute.
Beyond production control, minimum price enforcement further entrenches inefficiency. Prices are set based on estimated production costs rather than market forces, keeping consumer costs high and limiting competition.
Import restrictions are the final pillar. They ensure foreign producers do not undercut domestic ones. Jaime Castaneda, executive vice-president of the U.S. National Milk Producers Federation, complained that the official 2.86 per cent non-tariffed Canadian import limit was not reached due to non-tariff barriers. Canadian tariffs of over 250 per cent apply to imports exceeding quotas from the European Union, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and the Canada-United States-Mexico Agreement (CUSMA, or USMCA).
Dairy import protection obstructs efforts to reach more trade deals. Defending this system forces Canada to extend protection to foreign partners’ favoured industries. Affected sectors include several where Canada is competitive, such as machinery and devices, chemicals and plastics, and pharmaceuticals and medical products. This impedes efforts to increase non-U.S. exports of goods and services. Diverse and growing overseas exports are essential to reducing vulnerability to hostile U.S. trade policy.
It may require paying dairy farmers several billion dollars to transition from supply management—though this cartel-determined “market” value is dubious, as the current inflation-adjusted book value is much lower—but the cost to consumers and the economy is greater. New Zealand successfully evolved from a similar import-protected dairy industry into a vast global exporter. Canada must transform to excel. The current system limits Canada’s freedom to find greener pastures.
Ian Madsen is the Senior Policy Analyst at the Frontier Centre for Public Policy.
One of Canada’s prominent agricultural advocacy groups warned that should the federal Liberal government impose counter-tariffs on the United States, it could make growing food more expensive and would be a nightmare for Canadian farmers and consumers.
According to Grain Growers of Canada (GGC) executive director Kyle Larkin, the cost of phosphate fertilizer, which Canada does not make, would shoot up should the Mark Carney Liberal government enact counter-tariffs to U.S. President Donald Trump’s.
Larkin said recently that there is no “domestic phosphate production here (in Canada), so we rely on imports, and the United States is our major supplier.”
“A 25% tariff on phosphate fertilizer definitely would have an impact on grain farmers,” he added.
According to Statistics Canada, from 2018 to 2023, Canada imported about 4.12 million tonnes of fertilizer from the United States. This amount included 1.46 million tonnes of monoammonium phosphates (MAP) as well as 92,027 tonnes of diammonium phosphate (DAP).
Also imported were 937,000 tonnes of urea, 310,158 tonnes of ammonium nitrate, and 518,232 tonnes of needed fertilizers that have both nitrogen and phosphorus.
According to Larkin, although most farmers have purchased their fertilizer for 2025, they would be in for a rough 2026 should the 25 percent tariffs on Canadian exports by the U.S. still stand.
Larkin noted how Canadian farmers are already facing “sky-high input costs and increased government regulations and taxation.”
He said the potential “tariff on fertilizer is a massive concern.”
“If Ottawa goes ahead, we’re calling on them to compensate producers,” he said, adding that any funds raised through tariffs on “essential products like fertilizer should go back to the producer.”
Trump has routinely cited Canada’s lack of action on drug trafficking and border security as the main reasons for his punishing tariffs.
About three weeks ago, Trump announced he was giving Mexico and Canada a 30-day reprieve on 25 percent export tariffs for goods covered by the United States-Mexico-Canada Agreement (USMCA) on free trade.
However, Ontario Premier Doug Ford, despite the reprieve from Trump, later threatened to impose a 25 percent electricity surcharge on three American states. Ford, however, quickly stopped his planned electricity surcharge after Trump threatened a sharp increase on Canadian steel and aluminum in response to his threats.
As it stands, Canada has in place a 25 percent counter tariff on some $30 billion of U.S. goods.
It is not yet clear how new Prime Minister Mark Carney will respond to Trump’s tariffs. However, he may announce something after he calls the next election, which he is expected to do March 23.
