I started planting corn on April 28th. The day was sunny, and I had a quiet anticipation of dropping my corn planter in the ground and seeing my monitor start blinking. I’m not like a lot of other farmers, who revel in the nuances of social lore on the farm. Farming has always been an agricultural economic puzzle to me and much of my attitudes have been shaped by the early years of high interest rates and tough sledding. I find it a great relief when I toss my cap after the last corn goes thru my combine each fall. In between that and the first day of corn planting, there is always a lot of anxiety and tension. Then came 2020. LOL.
In my place I do a lot of writing beyond what I do for DTN, and with that, I get a lot of media requests for interviews. Some of these people I don’t know, some of these people I do know, and some are in between. However, I always tell them I’d be glad to help with their interviews. I was a young journalist once. This past week, it’s been a market report, a provincial podcast and a national CBC interview this weekend. With our food supply chain breaking down in real time, the world wants to know how we’re going to get through this. 2020 just keeps coming at you.
As I write this about 70% of Canada’s beef processing is offline. The Cargill and JBS plant in Alberta have had terrible issues with Covid19 and have had partial and full shutdowns. The Cargill plant is slated to go back online on May 4th, but who really knows. Whether its meat processing plants in Alberta, Ontario, Quebec or other provinces, it’s been a battle to keep lines moving. Empty shelves will surely be a result of this, as even the best supply lines would have a hard time covering up a short fall of 70%.
It got so bad this past week that McDonalds announced they would be sourcing beef from non-Canadian sources. The first thing that went thru my mind was American beef in Canadian restaurants, but our American friends are having terrible meat processing issues too. My next thought turned to Brazil, maybe they could supply McDonalds Canada with enough beef. Then late in the day, I read that Covid19 had spread to 9 local meat processing plants in Rio Grande Do Sul. According to Reuters, 16,345 people working in these plants could have been exposed. There have been several deaths and thousands infected.
What’s that mean? Simply put, it just makes things more difficult for McDonalds Canada to source beef, it just makes it difficult for those Brazilians. It’s another day in the neighbourhood. I was asked earlier today by a CBC producer prepping for my interview this weekend and she asked me to try and explain what is happening. I simply told her our food supply chain is breaking down in real time. Think of it this way, you have all kinds of agricultural commodities which used to go into a specific market like the restaurant trade. Suddenly, that is gone, and it’s very difficult to redirect everything into different supply lanes. People are trying diligently, but it’s difficult and almost impossible when considering perishable agricultural commodities like milk and horticultural products. Add in the Covid infections in processing plants and greenhouses and you have even more market disruption.
2020 is the year of market disruption. We thought the tariff war was bad, but nobody maybe except for Bill Gates, could have ever envisioned a time of pandemic. We will get through this, but it will be painful. I know 5 people who are dealing with positive tests for Covid19. When I think of it, it’s almost like there is no way out.
Needless to say, I’m not a health professional or a government official and it’s those people who will be leading us back. In the US, some states are opening up again with specific social distancing requirements to remain in place. I don’t know how you do that in a Tattoo parlour, but it is what it is. In Quebec, which has the worst Canadian outbreak, stores are opening outside Montreal next week and it will be followed the week after in Montreal. There are other reopening’s in the rest of Canada, albeit at a lot slower pace than in the United States.
The good news is grain prices went up today, partly on news that slaughtering capacity is coming back on stream in the US, partly on the news that even gasoline demand is showing signs of coming out of its funk and partly on who knows what. Maybe prices had just got so cheap, it was just time. Combine that with news from Ontario’s Chief Medical Officer of Health that we’re in day 5 of 6 of a gradual decline in Covid19 cases. He’s looking to see this happening for 14 days with infections below 200 before he’ll recommend a reopening of the economy.
It is what it is. Maybe we’re seeing the light at the end of the tunnel. I just hope it’s not another train coming from the other side.