050512 Tyson Foods Latest to Expand Canada Beef Plants

Winnipeg, Manitoba - Tyson Foods Inc. will start slaughtering more Canadian cattle at a plant in Brooks, Alberta, in mid-June after spending C$17 million ($13.6 million) on an expansion, the largest U.S. meat company said.

The company streamlined its operations and expanded its cooler space so it can slaughter 4,700 head of cattle a day, up from about 3,800, Tyson said in a release.

"Our investment in this project will help address the backlog of cattle caused by the continued closure of the U.S. border," Chief Executive John Tyson said in a statement.

Canadian farmers have struggled to manage the swelling herd of cattle since the country discovered its first case of bovine spongiform encephalopathy, or mad cow disease, two years ago.

Canada used to ship about 1 million head of live cattle to U.S. slaughter plants each year, but trade bans sparked by the mad cow case have kept the cattle at home, where prices have slumped because there are not enough slaughter plants to handle all the production.

The bans have hurt Tyson's bottom line, since it relied on Canadian cattle to fill 3 percent to 5 percent of its slaughter at U.S. plants, the company said.

The company temporarily shut down operations at some of its U.S. plants in January because of high U.S. cattle prices.

Tyson said it will gradually increase slaughter rates in Canada through the summer as it finishes the project and hires more workers.

The Brooks project is part of a wave of expansion north of the border as packers and farmers rush to revive a badly damaged industry.

Cargill Inc. is expanding its Alberta plant to handle more than 5,000 head a day, up from 4,000. The company also recently bought a plant in Guelph, Ontario, and announced it would expand processing from current levels between of 1,700 to 1,900 head a day.

Privately owned XL Foods upped its western Canadian capacity to 3,000 from 2,000 head a day, and a Montreal plant boosted its production to 1,000 head from 800, according to industry data.

More than 15 farmer-run groups have also announced plans to build packing plants, and smaller, provincially licensed plants have also expanded.

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