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Steak is at stake: beef prices set to rise as cattle producers struggle

Click to play video: 'Beef prices set to rise as cattle producers struggle'
Beef prices set to rise as cattle producers struggle
Beef prices at the supermarket could rise in the near future as farmers contend with drought and high feed prices in Saskatchewan and Alberta. Brody Ratcliffe has more. – Jul 14, 2023

Beef prices at the supermarket could rise in the near future as farmers contend with drought and high feed prices in Saskatchewan and Alberta.

“We are expecting a bit of a bump at the meat counter,” said Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University in Halifax.

He said dry conditions in the United States are making feed more expensive, resulting in prices tightening up across North America.

“When that happens, typically ranchers tend to get rid of their inventory. So supplies are an issue right now. There’s less meat to be sold, less beef to be sold.”

Charlebois said prices haven’t moved much over the last 18 months.

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“A lot of people think beef is very expensive, and has gotten more expensive in recent months. That’s actually not the case. There hasn’t been much change when it comes to prices in retail.”

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He said prices are expected to be adjusted accordingly now, with consumers now paying more for their meat.

Charlebois said it’s hard to say how much of an increase shoppers will see, but said that three years ago they saw a jump in price of about 25 per cent within a month.

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“I’m not saying that’s going to happen, but it really depends on market dynamics.”

He said food inflation is rising across the board, which means consumers won’t have as much buying power.

“Consumers are actually retreating with their wallets. They’re actually spending less at the grocery store as a result of higher interest rates.”

He said because of that, he feels grocers will be careful not to price beef out of the market.

Charlebois said if consumers see beef prices going up, it will drive them to consider pork or chicken instead.

“Pork remains very affordable compared to a few years ago.”

He said chicken prices rose for a while due to the avian flu, but said they’ve gone back down now.

Charlebois said he’s been telling Canadians to stock up on beef since May, noting that period is about to end.

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Kevin Antworth, president of the Saskatchewan Cattle Feeders Association, said he can’t speak for other feedlots as the situation varies, but noted that his feedlot has been dealing with drought conditions in the area for the past six years.

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“We’ve been average or below average for six years,” Antworth said.

He said they are keeping head numbers roughly the same, but it’s costing him more due to the cost  trucking  in the feed. “It’s putting us at a feed disadvantage to other feedlots in Canada and the U.S.”

Antworth also said there’s an abnormal number of mother cows  going to market, adding that he thinks there will be another big liquidation.

Grant McLellan, CEO of Saskatchewan Cattleman’s Association agrees, saying he expects the trend of large numbers of cattle heading to the market to continue.

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He said large portions of Alberta and Saskatchewan are facing drought conditions, which is creating a pressure in the feed-supply marketplace.

McLellan said farmers are reducing their herds, noting there are an increased number of animals being finished and going to the market, which is also creating some pressure on feed availability at feedlots.

He said they are still seeing the after-effects of droughts in previous years.

“We’re definitely seeing a potential shrinking of supply down the line in terms of beef availability without a significant, or any reduction, in demand from consumers.”

McLellan added that, with the drought in the United States, Canadian feed is looking more appetizing to U.S. ranchers due to the exchange rate between the U.S. and Canadian dollars

He said there’s also significant concern as to whether farmers will be able to keep their cattle fed throughout the winter.

“Winter feeding is going to be a concern and is a concern that has been brought to our attention by a number of producers.”

McLellan said rain is the best solution in this scenario, but said they’ve been calling for streamlined support from the Saskatchewan government, as well as calling on farmers to support each other.

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“If they have the feed available… be considerate and be thoughtful about the challenges that are being presented to other producers in the province. We do need to pull together on some of these things, and work together to help one another as we get through this.”

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