Businesses ride the ups and downs of the biggest beef recall in history
Tuesday, Oct 16, 2012 06:00 am
Beef sellers are ready to give XL Foods Inc. another shot, says the national trade association representing grocery stores, as the company looks to restart the plant, which was shut down after E.coli was found in its products.
The shutdown set shockwaves through a wide variety of Innisfail businesses, spanning almost every aspect of the beef industry.
“I think there will be a transition back as their production comes back online,” said Dave Wilkes, senior vice president of the grocery division of the Retail Council of Canada, noting they will be watching the Canadian Food Inspection Agency’s findings closely. “Our members will continue to have confidence in the product produced by XL once CFIA deems that they’ve taken the necessary steps, as they did earlier this week, and their product continues to flow.”
On Sept. 4 U.S. authorities discovered E. coli. in XL products the same day the Canadian Food Inspection Agency says it, too, found E.coli on beef trimmings from the slaughterhouse. Last week, XL Foods announced it would begin handling 5,100 carcasses remaining at the plant that have tested negative for E. coli.
Buyers at the Innisfail Auction Mart saw cow volume drop to 10 per cent of their normal levels at the regular Wednesday sale Oct. 10. XL buyers weren’t even in attendance, according to competing purchasers.
Marty Ward, who buys against XL for a variety of companies, says he’s tired of the finger pointing and thinks everyone needs to come together to get beef production back up to normal output levels.
“This is an industry problem,” he said, noting so far prices has held relatively steady, this week averaging 65-70 cents a pound for slaughtered cattle. “This isn’t what any producer – or competition – wants, because it’s a black eye.”
For Nossack Gourmet Foods, who produce products such as the Sunblest Steak & Vegetable Pie in Innisfail and get some of their meat from XL, the shutdown had a big effect but it wasn’t all negative. Previously they had been selling products with the XL brand to hotels and restaurants.
“It effects the industry hugely,” said owner Karsten Nossack. “I had to shift purchasing because XL brand is out of the game.”
He says they had stocked up on beef prior to the recall with meat from other processors and didn’t take a huge hit. In fact, he says, sales increased, although that came hand in hand with increased labour costs to help control the recall.
Last fall SunGold Specialty Meats Ltd., the Innisfail slaughterhouse, decided to stop processing beef, leading to 75 layoffs, it switched to a lamb-only facility. Accordingly, the plant was relatively unaffected by the recent recall.
Sales and marketing manager Miles Kliner says in their operations food security is paramount.
“We take food safety very, very seriously,” he said. “It’s absolutely integral to the processing here.”
Many consumers have rushed to local farmers in a bid to buy meat produced with more of a hands-on approach to quality.
Dereck Van Sickle at The Angus Store says sales have risen upwards of 40 per cent in the past five weeks. While such revenue is unprecedented at this time of year, the other side of their business is selling cattle, which is a segment of the industry mired in uncertainty.
“Sure business has increased,” he said. “But that’s just a small token of what it could cost us if the industry remains under pressure.”
Still, getting more people to try out homegrown beef is a good thing, he says.
“We have full accountability of our product under every step from the growing, to the processing, to the full retail,” he said. “It never leaves our control.”
Edgar Farms, another homegrown beef outlet, has seen a similar scenario, with sales doubling since the recall.
“We’ve definitely seen an upsurge in our sales,” said Elna Edgar, noting that can present its own challenges for free-range retailers. “You can’t just make more animals tomorrow.”
Innisfail/Sylvan Lake Wildrose MLA Kerry Towle says the province has to look at different options for improving the beef industry, including reducing regulations, and encourages consumers not to shy away from cuts produced by farmers in the province.
“Nobody wants an unsafe meat market,” she said. “Nobody wants unsafe products going out to Albertans.”