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Pluses and minuses: COVID-19 hurts then helps beef sustainability

COVID-19 may have created a chance for sustainable beef to fall upward from an initial dip early in the pandemic

[UPDATED: Nov. 3, 2020] Canada’s burgeoning value chain for sustainable beef was not spared the wrecking ball that was COVID-19 earlier this year, but it hopes to find greener pastures in which to land.

Why it matters: Efforts to build a separate supply chain for sustainable beef ran into challenges from market disruptions to logistical challenges with audits once COVID-19 hit, but increased public awareness of food systems might make for gain in the long term.

*The market disruption following the shutdown or slowdown of major beef plants in Alberta hit all parts of the beef sector hard in April, including the industry’s sustainable supply chain, made up of farms, feedlots and processors certified to standards set out by the Canadian Roundtable for Sustainable Beef (CRSB).

Cargill’s Alberta plant in High River, whose April closure helped drive widespread backlogs in the general beef sector, was also the first in Canada to be certified under those CRSB standards. It was the linchpin of the Canadian Beef Sustainability Acceleration Pilot, the first effort of what is now a permanent program to establish a separate supply chain for sustainable beef, and is still a major stream for the program, which promises producers a per-head payment for cattle moved solely throughout facilities similarly certified by the CRSB.

When the High River plant went down for two weeks, the sustainable beef program echoed the impact.

Emily Murray.
photo: File

“Our certified sustainable beef supply chain flexed with the industry during the COVID period, or during that key critical time when the supply chain was a bit constrained,” Emily Murray, Cargill general manager of beef sales to McDonald’s, said.

Their facilities saw a similar proportion of cattle qualifying for the program to their cattle volumes as a whole, she said, although the actual number of animals coming in across the board was down.

As a result, she said, the supply of certified sustainable beef did go down during the period when pressure on the plant was highest.

At the same time, however, the program’s end-use customers were also demanding less beef.

Cargill’s customers for certified sustainable beef have seen demand, “ebb and flow at different times during COVID(-19), as well as their supply,” Murray noted, given the sudden lockdowns and dining space closures and limitations.

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As of late mid-September, food-service industry group Restaurants Canada estimated its sector’s sales this year could drop to half what they were last year, while 10 per cent of food-service businesses had closed permanently and, “most are still losing money.”

Of the companies linked to the CRSB, three restaurant chains — Harvey’s, McDonald’s and Chop Steakhouse and Bar — have so far committed to serving a certain proportion of their beef with the CRSB claim.

“As we look, overall, at the course of the program’s performance, we’re going to see that it balances out,” Murray said. “Our sustainable beef program really just adjusted in line with the supply and demand of the entire industry. There was no individual impact to that program, distinct from what was happening overall in the industry.”

Murray does not, however, expect the pandemic to hit at the sustainable beef program long term. If anything, she expects improvements.

While supply dropped, the pandemic did not cause the system to grind to a halt, she noted. Producers were still being audited, albeit with adjustments. The supply chain remained intact, and was ready to pick back up alongside the rest of the sector.

Between April and June 2020, Cargill processed 1.2 million pounds of beef from certified sustainable farms, down only slightly from 1.3 million pounds reported the quarter before, despite the shutdown.

The per-head payment to producers, however, did not suddenly collapse, despite being based on volumes moved through the system. Producers could expect an $18.09 payment for an animal processed between April and June this year, two cents higher than the quarter before.

That price consistency matched Murray’s expectations, although she expected fewer of those payments to be made as fewer overall cattle were processed.

Silver lining

Those pushing the sustainable beef movement have argued that the pandemic may also open doors for growth, given increased public interest in food systems.

Select shortages on grocery shelves, as well as the well-publicized disruptions at meat plants, led to a sudden spike of interest in food security and food sourcing earlier this year, those advocates have noted, while increased public trust has been a longtime pillar of the sustainable beef movement.

Monica Hadarits.
photo: Supplied

“With the COVID-19 pandemic, it’s really shone a light on the food system and people are becoming more acutely aware of where their food comes from — the farmers and ranchers as well as all stages of the supply chain,” CRSB executive director Monica Hadarits said. “They’re really recognizing that all points in the chain are important to get our food from gate to plate.”

The CRSB’s efforts include a three-year communications and marketing plan, which it hopes will expand public awareness of the CRSB’s framework, as well as efforts towards sustainable beef in general.

Murray, for her part, says some of the sustainable beef program’s existing customers have shown, “acceleration of interest in moving forward and making commitments.”

Murray has fielded calls with relatively new potential customers, she said, while other relationships had started prior to the pandemic. Some of those conversations were paused during the early months of the pandemic and have since had to be picked back up.

“What I would say is that they’re definitely picking up with more fervour,” she said. “There’s a lot more interest in moving quickly. I think one of the things that came out of COVID(-19) in general for a lot of our programs is we learned that we can act more quickly than maybe we have in the past.”

Impacts at the farm gate

More farms have been added to the list of certified operations in 2020, although the rate has slowed. A total 1,297 farms are certified with the CRSB, the organization reported during its annual meeting in September, up from 1,223 farms as of the end of 2019.

Compared to the six months prior, however, the number of new farms becoming certified has fallen short of what the program may have come to expect. From the end of 2018 to the end of 2019, the CRSB reported a jump from 867 certified farms to 1,223, compared to the 74-farm increase reported in September.

The new challenges to doing business may have had much to do with that slowdown.

The pandemic brought significant hurdles for farms looking to get certified — in particular, the requirement for an on-site audit. Suddenly, the idea of having a stranger on farm and interacting with the farm family became less attractive for some farmers, while VBP+ had to be concerned with the safety of its auditors.

Sustainable beef saw the same processing woes and dampened market demand as the rest of the beef sector, but now COVID could be providing new attention and opportunities.  PHOTO: JEANNETTE GREAVES
photo: Jeannette Greaves

In March, according to VBP+ business manager Shannon Argent, auditors expressed some reluctance to carry out farm visits, especially those with vulnerable family members.

“We had an initial kind of, ‘we don’t know what’s going on,’ phase, and then we actually didn’t take very long to get up to normal business as usual,” she said.

VBP+ had initially stopped audits in March, during the early days of the pandemic. By early April, the organization had introduced COVID-19 protocols, efforts that were helped when the CRSB announced an exemption to its framework. The exemption allowed producers to opt for a remote audit, with the understanding that VBP+ would perform the on-site visit once COVID-19 risk had gone down.

“We were working on an electronic audit management tool anyway, so it wasn’t a big stretch for us to develop a remote audit methodology,” Argent said.

Producers could still opt for an immediate on-farm audit under COVID-19 precautions.

Most producers stuck with the initial on-farm audit since the audit did not require auditors to enter the house and social distance was easily maintained, Argent noted.

“There was ample disinfectant, even with our standard biosecurity protocol, so they were quite comfortable with the protocols we had enacted for COVID(-19),” she said.

VBP+ saw some audit backlogs, she said, but noted that enough auditors were available to quickly dwindle the list.

Looking to the future

In general, the CRSB’s efforts on the sustainable beef value chain was already in growth mode prior to COVID-19.

Three processors now carry a CRSB certification, including Cargill, which completed its audit on a second facility in Guelph, Ont., just prior to the pandemic.

Both JBS Canada and Atlantic Beef have been added to the processors verified under the CRSB framework.

As of July 1, 2020, CRSB certified farms accounted for about 17 per cent of the Canadian beef herd, while 4.78 million pounds of beef had been sold with a CRSB claim from July 1, 2019 to June 30, 2020, over half of the volume sold under the program since its inception.

And while concern over grocery shelves may have waned in the intervening months, Murray does not expect the new-found interest for action on sustainable beef to fade, although it might not ultimately orient around the term “sustainable.”

“I think that it’ll be a long-term thing. This was something that was growing in consumers’ interest even before the pandemic,” she said. “What I think might happen, and we’ve said this even pre-pandemic, will the word ‘sustainability’ in itself be the buzzword for consumers? Not necessarily. I think that might become more of an industry term whereas for the consumer, it will take on a new form, whether that’s ‘responsible sourcing’ or even ‘local,’ with local in that case meaning domestic, meaning Canadian.”

Hadarits agrees.

“The consumer research has indicated that, that conversation will likely continue to grow, so we’re continuing to work and move forward with that,” she said. “The interest is still there.”

*Update: A clarification to the beef industry’s supply chain was provided. 

About the author

Reporter

Alexis Stockford

Alexis Stockford is a journalist and photographer with the Manitoba Co-operator. She previously reported with the Morden Times and was news editor of  campus newspaper, The Omega, at Thompson Rivers University in Kamloops, BC. She grew up on a mixed farm near Miami, Man.

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