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Sask. government ‘shares pricing concerns’ with SSGA, but points to competition bureau

Click to play video: 'Saskatchewan ranchers want supply chain investigation' Saskatchewan ranchers want supply chain investigation
As inflation continues to cost Canadians at the grocery store, a Saskatchewan cattle industry group wants the government to conduct an investigation into pricing along the supply chain. One expert in food distribution says that might be a good idea to help determine where or not they're paying fair prices at the till – Jul 7, 2022

The government of Saskatchewan is empathizing with ranchers in the province calling for a formal investigation into beef pricing, but says the federal government is best equipped to complete such work.

Earlier this week the Saskatchewan Stock Growers Association (SSGA) asked the provincial and federal governments to “conduct a pricing investigation to address the significant imbalance in cattle and beef pricing markets”, saying ranchers in the province are struggling to the point where some are leaving the industry altogether.

“We share industry pricing concerns,” a government spokesperson said in a supplied statement.

“However, it would be best for the SSGA to discuss their investigation request with Competition Bureau Canada.”

Read more: Ranchers call for investigation into meat pricing

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According to Statistics Canada, while the prices of some cuts of beef have come down in recent months most have risen significantly in the past decade — in some cases nearly doubling and vastly outpacing the average annual rate of inflation.

Reached by Global News Wednesday, SSGA President Garner Deobold said “very little” of what consumers are paying at the counter trickles down to the primary producer.

“The grassroots rancher and farmer definitely are struggling right now,” he said.

“This goes back more than just recently, it’s over the last few years for a number of different reasons.”

He said the SSGA isn’t looking for a “government handout or more regulation”, but more transparency around where the money a consumer pays at the grocery store goes and a “more equitable arrangement”.

“We know what the packers will bid on cattle, from there it’s more or less exactly what the pricing is from where the processor takes control of the cattle and where it ends up on the retail shelf,” he said.

“From there to retail, it would be interesting to find out where that money actually ends up.”

If nothing changes, Deobold said, producers will reduce the sizes of the herds or exit the industry entirely. If that trend were to be prolonged, he worries, the industry itself might one day become unfeasible locally should processors decide to pull out of the area.

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Deobold added that some ranchers have already begun converting grassland to farmland which could come with environmental impact as sequestered carbon is released while land is ploughed.

He also worries processors could further detriment producers by limiting capacity at packing plants and allowing supply to build up in the pasture.

The SSGA put out a press release on the issue Monday and says at this point it hasn’t had significant further conversations with either government level.

Read more: Nutrition labelling will soon be required on front of some packaged food in Canada

The SSGA isn’t alone in issuing such a call to action.

In late May US senators introduced a bipartisan resolution to direct the Federal Trade Commission to investigate anticompetitive practices and violations of antitrust laws in the American beef-packing industry.

According to senate documents “American ranchers today receive approximately 39 cents of every dollar a consumer spends on beef, compared to the 60 cents they received 50 years ago, and between 2015 and 2018 the spread between the cost of wholesale beef and the price paid to ranchers increased by 60%, while the top beef packers enjoyed record profits.”

That bill has been referred to committee.

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Meanwhile, class-action lawsuits against meat-packing companies have been launched this year in both Quebec and BC.

Read more: Class-action lawsuit filed in Quebec against meat-packing companies for price fixing

Global News reached out to Canada’s largest meat processors, Cargill and JBS Foods Canada, for comment but has not yet heard back.

Global News has also reached out to the Competition Bureau for comment but did not hear back in time for deadline.

The Saskatchewan government added in its response that “we recognize the livestock sector has faced considerable challenges from circumstances beyond their control, including last summer’s drought, severe weather this spring, supply chain challenges and inflation.”

“At the provincial level, we are focused on continuing to support producers through our existing suite of business risk management programs. These programs remain the primary line of defense for producers against unforeseeable risks and ever-changing market conditions. In addition, our government responded to last summer’s drought conditions with the Canada-Saskatchewan Drought Response Initiative, and an increase to the cap and cost-sharing formula for water development projects under the Farm and Ranch Water Infrastructure Program,” the statement continues.

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