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Thursday, June 20, 2024

Cargill Adjusts Beef Production Following Weeklong Strike at Canadian Plant

Cargill Inc., a major global food company, has been forced to shift its beef production operations due to a weeklong strike by workers at its Dunlop plant in Guelph, Ontario, Canada. Approximately 1,000 employees went on strike on May 27, halting operations at the facility, which has a daily capacity to process 1,500 head of cattle.

Impact on Beef Production

The strike has significantly disrupted Cargill’s beef processing activities. The Dunlop plant, along with another facility in Alberta, accounts for 55% of the beef processing market in Canada. The closure of the Guelph plant represents a loss of around 90% of the beef processing capacity in Ontario.

Reasons for the Strike

The workers, represented by the United Food and Commercial Workers (UFCW) Local 12R24, went on strike after rejecting a proposed four-year agreement from Cargill. The company claimed the agreement would have resulted in a 9.3% wage increase in the first year, but the workers found the offer insufficient.

Consequences for Cattle Producers

The strike has raised concerns among cattle producers in Ontario. Craig McLaughlin, the president of Beef Farmers of Ontario, expressed worries about the impact on the industry, stating that smaller plants cannot absorb the entire volume from the Dunlop facility. Producers may face challenges in finding alternative markets for their cattle, potentially leading to increased costs and weight loss during transportation.

Cargill’s Response

Cargill has stated its disappointment with the strike outcome and expressed concerns about the potential hardships it could cause. The company plans to shift production to other facilities within its supply chain to minimize disruptions for customers.

Impact on Consumers

While the strike has significantly affected beef production in Ontario, experts suggest that consumers may not notice major short-term price changes unless the strike drags on for an extended period. However, consumers may see an increase in beef products from other countries in grocery stores.

In summary, the weeklong strike at Cargill’s Dunlop plant in Guelph has disrupted the company’s beef production operations, raising concerns among cattle producers and potentially leading to supply chain disruptions if the situation persists.

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