Operating revenues for Canada’s beef and pork producers jumped in 2014, as farmers in the United States suffered from drought and a pig epidemic.
That was great for farmers’ bottom lines, but meant that consumers paid more for meat last year.
Financial data about Canadian farming was released today by Statistics Canada.
Farm gate prices for Canadian pork producers rose because of an outbreak of porcine epidemic diarrhea in the United States, which killed millions of piglets there, explains University of Guelph professor Sylvain Charlebois.
The disease did appear in Canada, but on a much smaller scale.
Beef prices were boosted by a widespread drought in several regions of the United States, Charlebois said.
Severe drought devastated beef producers in large regions of the U.S. in 2014, forcing many to cull their herds as pastures dried up and corn prices skyrocketed.
“What happens then is that producers prematurely sell their herds to save money on higher input costs. To feed cattle is very costly – you’re looking at a two-year cycle.”
Processing giants Tyson and Cargill turned to Canada to meet U.S. consumer demand for beef, and as the drought eased U.S. cattle farmers looked north for animals to rebuild their herds.
“If you have something to sell, you’re making a profit, because supplies are low,” Charlebois said.
“For producers, this is the nature of agriculture. If you aren’t affected by droughts, or by a biosecurity situation, you will gain from the misery of others. That’s the sad part.”
“Every time there is a situation affecting agriculture, if you actually do have something to sell, and productivity is affected by a virus, or climate, you are going to be gaining from other people’s losses.”
Will meat prices ease for Canadian consumers?
Not likely, Charlebois warns. A low Canadian dollar makes our livestock attractive to American buyers, and export markets may open for Canadian meat further afield.
“Hog producers are really hoping that the Trans-Pacific Partnership will be ratified, because of the Asian market. It will give more access to very lucrative markets in Asia.”
Under the TPP, Japan will phase out stiff tariffs on imported beef and pork.
“I’m highly doubtful that meat prices will actually drop any time soon. It’s our new normal.”
“If farm gate prices do drop, which I’m not sure they will, I think the demand for beef around the world, and for pork remains quite robust.”
WATCH: Any visit to the meat counter can already bring sticker shock, but now there’s word consumers could be paying even more in the year ahead.
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