ABOVE WATCH: The drought in Alberta will likely cost you more at the meat counter, despite already record prices for beef. Global’s Doug Vaessen has more.
Two of Canada’s biggest banks are now offering cheaper loans to farmers dealing with dry conditions, but it may be too late to stop beef prices from going up even more.
Prices for everything from hamburger to filet mignon were already at record levels.
Now prices for hay needed to feed cattle have sky-rocketted — doubling this past month alone because of low supply.
RBC and BMO have started promoting special loans and reduced prices for farmers caught in the drought.
“I haven’t had it this bad ever in my lifetime,” said Dave Heaven. “I mean, we have gone through dry spells in the past, but we have never had it this bad.”
The dry conditions have wiped out about 75 per cent of Heaven’s hay crop.
On one portion of his land, the Calgary-area farmer would normally get six large bales, but this year he will only get one.
“I have customers that need some hay for the horses and the cattle; it’s going to be a terrible situation come fall time, because there is not going be any left,” he said.
Beef producer Jolene Noble raises cattle near Grande Prairie, and says hay is also scarce in Northern Alberta.
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“It’s not necessarily what the price is on it, but even if you can find it,” she said.
Noble says the cost of feed pellets has also doubled.
It means producers are looking at selling their calves this fall, rather than incur the cost of feeding them through the winter, or culling herds because of a lack of feed.
“We are really hoping that with the reduced numbers that our herd has this grazing season, we will be able to retain as many as we can,” Noble said.
The Alberta government is already differing taxes for beef producers forced to sell, in order to help them buy back next year.
Beef prices aren’t expected to drop even when the dry conditions are over, because that’s when producers will reduce supply even more in order to build their herds again.
“That is when you actually see the highest beef prices for consumers … when that expansion is just starting,” said Brenna Grant, a cattle industry expert.
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