Coronavirus may cause temporary meat shortages. But higher prices will last longer

Empty grocery store shelves have in some ways become synonymous with the COVID-19 pandemic in Canada and the world.

The outbreak has turned the food industry on its head. Lockdown measures and stay-at-home orders have Canadians buying up food items, like meat, at rates that experts say were impossible to predict.

All things considered, Canada’s food supply chain has weathered the unprecedented situation well, according to Lenore Newman, director of the Food and Agriculture Institute and professor of geography at the University of the Fraser Valley.

“This is the single biggest disruption to food systems in modern times. We went overnight from a restaurant sector that took about 40 per cent of the food going to nearly zero,” she told Global News.

“If you’re confronted with an empty shelf, that’s just part of the experience of this pandemic.”

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Agriculture Minister Marie-Claude Bibeau, industry leaders and other experts have all insisted that Canada is not facing shortages of food. However, Bibeau has acknowledged that issues within the supply chain could result in higher prices and changes in the variety of products at grocery stores.

Still, there is no guarantee meat shortages, in particular, won’t develop, Newman said. She explained that should the issues continue at meat-processing plants, the strain on supply could be accelerated.

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“We’re learning that these facilities are very vulnerable to COVID-19. That’s not really anyone’s fault, it’s just the way the virus works. It’s a human environment,” she said.

“I think some of the lessons we’re learning and the changes we’re making in processing plants will lead to meat being more expensive down the road on an ongoing basis.”

The squeeze on meat supply in Canada is, in part, linked to COVID-19 outbreaks at a number of meat-processing plants. Several meat processors have suspended operations to eliminate the outbreaks. Others have seen operations slowed in order to adapt to physical distancing measures implemented to stop the virus from spreading.

Cargill Inc. in High River, Alta., is set to restart Monday after it shut down for two weeks. There are 821 cases of the virus tied to the plant and one worker has died.

The JBS Canada beef plant, also in Alberta, has seen 276 cases and one death among workers. It continues to operate, but at reduced capacity.

A pork processing plant in Breslau, Ont., that accounts for about one-third of the federally-inspected pork produced in Ontario, shut down on April 27 for a week — also due to COVID-19.

“It’s affecting efficiency; it’s slowing down the line,” said Gary Stordy with the Canadian Pork Council.

“There’s not as much product coming out, destined for grocery stores, that would come out on a normal day.”

Stordy said plants across the country are seeing a slowdown in production, causing the price of pigs to plummet nearly 50 per cent.

“There could be sporadic shortages, but most likely the biggest effect will be an increased price at the consumer level,” he said.

“It’s an interesting dynamic. We’re dealing with a low price on the sourcing side, but that’s because on the other side it’s much higher.”

As part of the federal government’s aim to keep the supply moving, millions in new funding for farmers was injected to Farm Credit Canada, which the government says has allowed thousands of producers to defer loans.

The Canadian Food Inspection Agency is also working to increase the number of inspectors available to maintain safety protocols and keep plants in operation.

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An “inter-provincial trade” agreement — something many facets of the food supply industry have called for — is also in the works to avoid food shortages, Bibeau said Wednesday.

So far, the government is looking toward moving product between Alberta and the Northwest Territories.

Canada’s meat market is integrated enough globally that it can withstand rapid changes in demand, said Michael von Massow, a food economist at the University of Guelph in Ontario. He said that’s likely helping keep shortages at bay for now.

Von Massow used McDonald’s as an example of where this works. The Canadian arm of the restaurant chain recently announced it would start importing beef due to limited processing capacity at Canadian suppliers, such as the Cargill plant.

“They’d still prefer to buy Canadian and when the Canadian plant reopens, they’ll go back to it,” he said, “but McDonald’s didn’t stop serving burgers because the plant closed.”

Like Newman, von Massow said that adaptability challenges will depend on whether more plants shut down — both in Canada and the United States — and how long those shutdowns last.

That, too, could bring meat prices up, he said.

“We’d have to transport stuff further. These products move freely across the border, but it’s moving now to where it makes the most economic sense,” he said.

“When there’s a disruption, product has to move from a place where maybe it wasn’t moving from before, which can increase prices.”

The barren refrigerated meat racks at grocery stores are “temporary” otherwise, he said.

“While demand-based shortages are inconvenient, they are less concerning,” he said.

But price changes could be lasting, Newman said. The reconfiguration of plants to adhere to physical distancing measures could usher in efficiency changes for the long run, she said.

“We could say, ‘Well, this is a one-off.’ But is it?” she said.

“Kind of like how airlines are struggling with what to do with the middle seat. I think we’re going to see food safety folks reconsider how these jobs are done, at risk of another problem. I think we’re going to be a little more skittish after this.”

— With files from The Canadian Press and Global News’ David Akin