Canadian ranchers call for investigation into meat prices
Packers and retailers continue to profit while growers struggle to make ends meet
Saskatchewan Cattlemen’s Association (SSGA) calls on the provincial and federal governments to conduct a price survey to correct the significant imbalance in the cattle and beef price markets.
“While each industry sector has its own frustrations, we agree that price transparency and discovery, packer capacity and price allocation are our primary common concerns,” said SSGA President Garner Deobald.
The severe drought in the Canadian Prairies has had a significant impact on the cattle industry. Grass continues to be scarce in many areas, and feed grain and forage prices have doubled over the past two years. The situation has resulted in greater availability of slaughter-ready cattle with higher placements in feedlots.
According to a SSGA press release, cattlemen and feedlots are operating at a loss, forcing many agricultural companies to make the difficult decision to reduce cattle numbers or even exit the business, affecting prices livestock throughout the supply chain as well as in the domestic market and for export. beef price.
“Reducing the number of herds could result in more grassland being converted to farmland,” Deobald said. “Removing grass cover also eliminates the habitat that species at risk call home and releases carbon sequestered in the soil into the atmosphere as carbon emissions.”
“Many producers and feedlots are feeling challenged by rising costs due to inflation, fuel and record feed costs,” he continued. “Our members share their frustrations with us. There is a disconnect between what producers receive for their animals and the high prices consumers pay for beef products. Producers feel exploited.”
“Although packer margins have tightened, packers and retailers are seeing strong profits as consumer demand and willingness to pay higher prices for beef products remains strong,” Deobald said. “Producers are tired of working so hard for little or no return on investment. “
Although the pandemic imposed restrictions on packers to optimize worker safety through work spacing requirements, packers were operating at near capacity within months of the lockdown announcement. More recently, packers stopped working extra shifts because they cleared the backlog. However, industry members question the abattoirs’ strategy, which appears to limit the amount of product available at retail ― keeping canned beef prices high while allowing the supply of fed cattle to expand at the campaign, keeping cattle prices low.
“Limiting supply to drive up prices is changing the face of Canadian agriculture. Packers and retailers know there is no one else to take their place or make a profit, so they are in control right now,” Deobald explained.
Beef is considered a protein-rich staple in many homes. When beef prices rise, many consumers are willing to pay more while others cannot. When commodity food prices exceed what consumers are able to afford, both producers and consumers are negatively affected.
“Our goal is to produce safe and nutritious beef for Canadians while maintaining our farming livelihoods,” said Deobald. “If producers continue to operate at a loss, many will close, which could lead to Canada becoming dependent on imported meat. We believe that a price survey is the best way to ensure that all members of the livestock value chain remain profitable and that all Canadian consumers have economic access to our products. We look forward to working with all stakeholders to make this happen.