Browsing by Author "Nolan, Kinga"
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Item Open Access Beefing up the Cattle Supply Chain: Policies for improving Canada's beef sector resiliency(2023-05-29) Nolan, Kinga; Fellows, KentIn the last decade, the Canadian beef sector was subject to two major supply chain shocks; in 2012, XL Foods shut down for two months after their beef was linked to 18 cases of E. Coli and in 2020, two of Canada's largest beef processing plants closed or reduced capacity for three weeks to contain hundreds of COVID-19 cases among plant employees. Both incidents caused extensive disruptions throughout the cattle supply chain, which lasted months. To understand how these closures affected the cattle supply chain, I run a series of linear regressions using panel data to test how the plant closures affected ranchers' profit margins, processor margins, beef retail prices, and net exports. The results suggest that ranchers' margins were negatively affected in 2012, but less so in 2020. Smaller processors were negatively affected by the XL Foods closure, but medium-sized facilities saw increased profit margins in 2020, which suggests the generation of scarcity rents. Beef retail prices decreased in 2012, but not in 2020 likely due to exogenous changes in demand, rather than either of the plant closures directly. Finally, the value of beef exports drastically shrank in 2012, notably because the United States suspended beef imports from XL Foods for four months. I argue that these findings can inform proactive public policy to limit the negative impact of these events in the future. Governments should consider homogenizing inter-provincial trade beef regulations, incentivizing automation and blockchain technology traceability programs in processing facilities, and most importantly, ensuring the Canada-US border remains open to trade to maintain a competitive environment between beef processors.