The temporary closure of an Alberta meat processing facility due to a COVID-19 outbreak isn’t expected to result in beef shortages, but the reduction in capacity will mean that ranchers will bear the brunt as their costs rise and prices for their product fall.
Meanwhile, a second plant — JBS plant in Brooks, Alta. — recorded 96 cases as of Wednesday. It has reduced operations, according to the Canadian Cattlemen’s Association, which represents the 60,000 beef farms and feedlots in the country.
The CCA says it is trying to ensure the facility remains open, though a union representing federal meat inspectors says it’s a matter of time before it is forced to temporarily halt production.
Story continues below advertisement
These two facilities make up 70 per cent of Canada’s beef processing capabilities, according to the CCA.
Occupational Health and Safety is conducting investigations looking into “potential exposure of workers” to the novel coronavirus at both the Cargill and JBS plants.
Alberta’s chief medical officer of health Dr. Deena Hinshaw confirmed Wednesday one JBS worker had died but the cause of death is not known. It is not known to be a case of COVID-19, she said, so an investigation is taking place to determine the cause.
With the Cargill closure and JBS’s reduction, Canada has likely seen a reduction of nearly 40 per cent in its processing capacity, said Mike von Massow, an associate professor in the food, agricultural and resource economics department at The University of Guelph.
However, shoppers aren’t likely to see empty freezers in the grocery store meat section any time soon.
“In the short run, I don’t think we as consumers will see any tangible difference,” he said.
The prime minister echoed that message Tuesday, reassuring Canadians they would continue to find beef products on grocery shelves.
Story continues below advertisement
“We are not at this point anticipating shortages of beef, but prices might go up,” said Prime Minister Justin Trudeau during his daily update on the coronavirus pandemic.
“We will of course be monitoring that very, very carefully.”
1:53 COVID-19: Brooks mayor responds to skyrocketing confirmed cases, meat plant concerns
COVID-19: Brooks mayor responds to skyrocketing confirmed cases, meat plant concerns
Beef producers and associations have said they will prioritize ensuring Canadian supply before exports, he said.
Canada exports about 45 per cent of its beef and cattle production annually, according to the national association, and ships to 56 countries, with the U.S. receiving 74 per cent of beef exports.
It’s likely the Cargill plant will be closed for about two weeks — the duration of the virus’s incubation period, said von Massow. That’s roughly how long the temporary closure of a pork processing plant in Quebec lasted.
Olymel announced March 29 it would temporarily close its hog slaughter and cutting plant in Yamachiche, Que., for 14 days after nine plant employees tested positive for COVID-19. The closure gave employees the time to self-isolate at the recommendation of the public health department. The plant resumed operations on April 14.
A two-week closure allows staff to self-isolate to prevent further spread, deep clean a facility and implement any other measures to help physical distancing after reopening, said von Massow.
During a closure, inventories can be diverted and processing capacity can be increased at other facilities to avoid a shortage, he said. It would take months-long closures, as well as multiple plants shuttering to create a possible shortage.
Ranchers, though, are likely to suffer even from these short-term closures, he said.
If they have to send their cattle further for processing, transportation costs rise and that will come out of the price they’re paid for their product. If they decide to hang on to their animals longer, they’ll face increased overhead costs, like feed, said von Massow.
In the past week, ranchers have seen a nearly 30 per cent drop in price, said Dennis Laycraft, executive vice president at CCA.
The group’s economic scenarios project the industry could lose more than $500 million in revenue by the end of June. It is calling for immediate government action.
That includes improving the availability of cash advances, said Laycraft.
“It’s not easy to deal with lenders when the value of your product is falling sharply and no one’s really sure what it’ll be worth in that environment.”
The group also wants price insurance program premiums brought back down to normal levels, he said.
Story continues below advertisement
“For young and newer producers that have more debt, that’s a pretty important thing.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
