July 24, 2007/Guelph Mercury/Ontario, Canada -- More than one-quarter of Better Beef's employees will be out of work by the end of this week.

Cargill Ltd., which bought the Guelph plant about two years ago, announced it is cutting about 300 positions, trimming its workforce from about 1,100 staff to 800.

The cuts, which take effect Saturday, will be achieved by eliminating an afternoon shift in the cutting room, and reducing the number of cattle killed daily from 1,700 to 1,400.

Chris Watson, chair of Local 175 of the United Food and Commercial Workers union, said workers learned first thing yesterday morning about the cuts.

"We were called into a meeting at 6:30 this morning and the company announced this was going on," Watson said. "We were told it is an indefinite layoff. We're not sure that there are going to be recalls.

"The morale is pretty low right now."

Cargill spokesperson Rob Meijer said the company hopes some laid-off employees can be called back, "but at this time we're not overly optimistic."

Meijer said the layoffs are "the culmination of a couple of variables."

These include the "lingering impact" of the mad cow crisis -- after bovine spongiform encephalopathy (BSE), known as mad cow disease, was found in an Alberta heifer more than four years ago -- and prices being driven down by a strong Canadian dollar.

New federal regulations on how slaughtered cattle are processed, which came into effect earlier this month and aim to speed up the total eradication of BSE, have greatly increased production costs.

Meijer called the layoffs "one of the most difficult decisions Cargill has had to make in a long time.

"Our commitment is to this industry ... and we didn't make this decision lightly," he added.

Watson, a 15-year employee, said the 300 employees to be laid off will be determined based on seniority.

He said a quick review of the seniority list suggests workers hired as early as 2004 will be put out of work.

Better Beef was purchased in the summer of 2005 by Cargill Ltd., the Canadian subsidiary of international meat processing giant Cargill Inc.

The takeover was opposed at the time by the National Farmers Union, which warned the deal would see Cargill controlling a dangerously large segment of the Canadian beef packaging sector and could lead to Better Beef's closure.

"It's not surprising," NFU executive secretary Terry Pugh said yesterday of the layoffs. "I'm glad it's not as bad as we thought might happen, but it's sort of inevitable when you have one group controlling so much of the marketplace to see rationalization."

HOwever, Meijer said the 300-per-day reduction in the cattle being slaughtered at Better Beef will not be picked up by another Cargill facility.

"In terms of our company this is a pure reduction," Meijer said, adding Cargill is hopeful its suppliers will be able to find other markets to sell their animals.

Not likely says the Guelph-based Ontario Cattleman's Association.

Lianne Appleby, the association's communications manager, said all beef processors are dealing with increased costs associated with the new processing regulations. She speculated other packers will have to look at cutting back their operations to deal with these costs, which will mean fewer opportunities for farmers to sell their animals.

"Farmers have already taken a hit with BSE, and now this is another hit they've had to take on," Appleby said.

From the July 30, 2007, Prepared Foods e-Flash