Ontario beef industry assesses fallout from processor's suspension

Saturday, September 29, 2012

by SUSAN MANN

Ontario beef farmers may not necessarily get hit with lower prices because the operating license of major western beef processor, XL Foods Inc., has temporarily been suspended by the Canadian Food Inspection Agency.

Brian Perillat, manager and senior analyst with CanFax, says for farmers in Western Canada the loss of XL Foods Inc., a major buyer that has the capacity to process more than 4,000 head a day, is creating uncertainty in the market and knocking cull cow prices down by 10 cents a pound compared to three weeks ago. It’s hard to assess the effect of the license suspension on other markets “partly because the U.S. market has dropped significantly over the last week or two.” The price drop is unrelated to the XL Foods closure.

CanFax is a division of the Canadian Cattlemen’s Association that tracks cattle prices in Canada.

LeaAnne Hodgins, spokesperson for the Ontario Cattlemen’s Association, says Canadian and American cattle supplies are really low now so “that gives some capacity for cattle demand at other facilities in Canada and the U.S.”

She agrees with Perillat there will be little impact on Ontario farmers in the short term but that could change depending on how long it takes XL to regain its license.

Perillat says going forward “we’ll be at more of a discount compared to the U.S. market.” The price drop for Canadian beef farmer may be unnoticeable if the plant closure only lasts a few days but if it’s prolonged it “will likely affect our markets.”

All products currently at the XL plant are under CFIA detention and control, the agency’s Sept. 27 press release says. They will only be released after being tested for E.coli 0157:H7.

CFIA suspended the Brooks, Alberta company’s operating license Sept. 27 and said in the release the business won’t resume “operations until they have demonstrated that they have fully implemented the agency’s corrective actions.”

Since Sept. 16 the company has been involved in a massive voluntary recall of more than 250 beef products due to the detection of E. coli 0157:H7. The products include ground beef, beef patties, meatballs and meat loaves that have been available in stores across Canada, including Ontario. The product list along with stores, UPC codes and best before dates is available on the CFIA website.

Perillat says the plant doesn’t process any cattle from Ontario. “It (the closure) shouldn’t affect any of the markets in Ontario.”

The only concern for Ontario farmers is if the recall and its portrayal in mainstream media causes consumer demand to drop off. “We haven’t seen that yet,” he says.

Perillat says he couldn’t comment on how the government and CFIA are handling the recall. But some MPs have been critical of the government’s actions.

In the House of Commons on Sept. 27, MPs questioned Agriculture Minister Gerry Ritz about the matter. Liberal Interim Leader Bob Rae is quoted in Hansard, the official written record for the House, asking the government to explain about the CFIA being informed by American border services on Sept. 4 that products from XL Foods were contaminated with E. coli. Why did it take 12 days before the Canadian government issued a recall notice?

Ritz in Hansard says Rae is correct that the Americans notified Canadian officials on Sept. 4 “the day we also discovered another interference in a plant in Calgary at the same time. We were able to contain that shipment. It was from the same shipment that went to the border and to Calgary. We were predicated on getting that out of the marketplace.” The agency then started to work with the XL Foods plant “as to what would be needed ongoing. That was based on science, not on speculation.”

During a technical briefing for reporters Friday morning, Dr. Brian Evans, CFIA special adviser to the president and former chief veterinarian and safety officer, says their actions throughout the recall were and continue to be guided by science-based evidence and a commitment to protect public health. “To this end the CFIA has taken and is continuing to take comprehensive and aggressive action to respond to the E. coli issues.”

CFIA’s response started Sept. 4 when it first detected through agency testing E. coli 0157:H7 in products produced from an Alberta processing facility supplied by XL Food Inc. That was the same day CFIA was told by American officials they had found E. coli through testing at the border in beef trimmings from XL Foods.

The CFIA verified no affected product from the Alberta processing plant or product detected by the Americans “was at the retail level in Canada. We then launched into an immediate investigation to determine the source of the contamination.”

That investigation led to a recall of products produced at XL Foods on August 24, 27, 28, 29 and Sept. 5, he says, noting the agency’s review didn’t identify any single factor that would lead to E. coli 0157:H7 but there was a combination of several deficiencies.

Among those deficiencies: the company wasn’t able to demonstrate through documentation that it was consistently and effectively implementing its agreed control program. The company took initial steps to ensure the safety of food being produced and committed to additional steps to deal with all of the issues identified and to prevent the recurrence of contamination, Evans says. But based on information provided to CFIA by XL Foods on Sept. 26 and through observations by CFIA full-time staff in the plant “we did determine that these deficiencies had not been completely corrected.”

Evans says the company hasn’t adequately implemented agreed upon corrective actions yet and “has not presented acceptable plans to address longer-term issues.”

For its part, XL Foods says in a recorded message on its media information telephone line that it's concerned about the people who have been sickened by E. coli. “Even though there has been no definitive link between our products and people who have become ill we are very concerned for their well being and working in their best interests,” the message says.

The company is working with the CFIA and Alberta Health Services to understand more about the recalled steaks the agency says caused illness, the message says.

XL Foods officials couldn’t be reached for comment. BF