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Dark days ahead predicted for beef industry |
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Wednesday, 26 March 2008 |
Mark Francis the Zone 1 delegate for the Alberta Beef Producers, can sum up the state of Canada's beef industry in two quick sentences.
By Garrett Simmons
Taber Times
"The prognosis for the beef industry this year is disastrous. It's not good."
Francis added that financially, no one in the industry is doing well at the moment.
"Everybody is losing money, right from the cow-calf guy right to the packer."
The culprits for beef industry's struggles have been well documented.
"It's the dollar and the high feed-grain prices that are doing it - it's kind of a double whammy," said Francis, who added the two forces working together at the same time have spelled trouble.
"It's kind of bad because we could handle the high dollar if feed grain was low, and we could handle high feed grain if the dollar was low, it's just kind of the two are working together against the industry."
The Alberta Beef Producers delegate was quick to add beef producers could not blame their woes on the grain industry, which has also had its struggles over the years.
"It's hard to point the finger at the feed grain because the farmers deserve to make money too, and they've been losing money on feed grains for a long time."
With economic factors conspiring against the beef industry, it may be difficult for producers to see any light at the end of the tunnel.
According to Francis, there are some plans in the works to help improve things for the beef industry, plans which start with some pressure on the government.
"Mostly, what the Alberta Beef Producers are working on and lobbying the government for are less regulations. We're so heavily burdened with regulations and costs that we have up here that the Americans don't have, and it's killing us - different pharmaceutical costs and even drugs that they have that we can't get, just because the companies won't apply to have them registered in Canada because it's such a small market. Health Canada won't accept the U.S. Food and Drug Administration's findings on a lot of those things, so unless they apply to have them registered here, it doesn't happen."
A task force struck last November was charged with finding options for beef producers, options which did include the regulation issue, different ways of marketing cattle and trying to get additional money generated from options like the Open Spaces Program.
Whatever plans are being devised at the moment to help producers, Francis added there may be nothing out there to help turn things around immediately.
"The beef industry is in a world of hurt, and I don't think there's any silver bullet or quick fix."
To complicate matters, beef producers north of the 49th parallel have one more thing to consider - how much is costs to have an animal finished in this country.
"It's also our slaughtering costs - it costs about $80 an animal more to slaughter an animal in Canada than it does in the U.S., just because of our whole SRM (specified risk material) removal," said Francis.
"It cost more to kill them up here - that's why last year, a record number of cattle headed out of here."
Producers in the United States do not have the SRM removal issue to deal with come slaughtering time, and also have a few other advantages over their Canadian cousins, according to Francis.
"It's not a rosy picture there either but they're not struggling nearly as much as we are. They don't have the same slaughtering costs, and they have the ability to eat all of the meat they produce right there. They're a net importer of meat, where we're a net exporter of meat. They're in a down market but they're not in the same boat we are in."
Speaking of boats, Francis added feed-grain prices will likely stay high for the next two years or so at least, and when you add that up with the unpredictable Loonie, producers have to decide whether or not to go down with the ship.
"I guess it's like a sinking ship - when do you jump off? Do you hang on and hope something good happens and you're saved, or do you jump quick and try to swim for shore? Nobody is offering sound advice on that because there isn't any. I don't think you can see your way out of it."
With winter coming to an end and spring upon us, cattle prices are certainly a source of worry for producers.
"I think they've kind of stabilized out a bit but as we get further into the spring to May and June, fat-cattle prices, the cattle who get slaughtered, tend to drop off because the numbers are ready to be killed," said Francis. "The feed cattle... it sounds like they are up a cent or two but they're pretty depressed there. Everybody I talk to that's selling right now are pretty unhappy."
With all the Canadian beef industry has gone through in recent memory, the current combination of the high Loonie and high feed-grain prices has seemed particularly difficult to deal with.
"It's been a tough five years - BSE those first couple of years was tough and we thought that was the worst thing the industry could see and yet this is just as tough, or tougher. I think what makes it tougher is coming off those years, we've had no time to re-build financially. It's just been five years of a slap in the face, and personally, I think we're in for at least one or two more years of it." |
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