Farmers claim Canada drought will not hit beef prices

By Michelle Perrett

- Last updated on GMT

Farmers and producers are finding that there is a reduced availability of grass and feed for the winter
Farmers and producers are finding that there is a reduced availability of grass and feed for the winter
The drought in Alberta, Canada, will not have any “immediate impact” on cattle prices, the CEO of the Alberta Beef Producers Rich Smith has told Global Meat News.  

He confirmed this after press reports had indicated the prices of steaks and other products were set to rise.

He said: “These reports are incorrect. This drought will not have any immediate impact on the price of beef. The price of beef is high and could go higher due to strong demand and short supplies, but the cattle being turned into beef now were born long before this drought occurred.”

Farmers and producers are finding that there is a reduced availability of grass and feed for the winter. The result is that the price of feed is expensive and this is cutting into the profits of farmers and producers.

Positive signs

However, Smith claimed there were some positive signs as many parts of the province had significant rains over the past couple of weeks.

“Farmers and ranchers have found it difficult to find grass for grazing and feed for their cattle,”​ he said. “When they can find feed, it is very expensive.  We won’t know the final impact of the drought on feed supplies until we see how grass, forage, and crops can recover with the recent rains.”

He admitted that the shortage of grass and feed has led to some sales of breeding animals earlier than normal but these have not been in large numbers.

“Selling breeding animals or selling feeder animals early are last resorts for producers and most of them seem to looking for feed and hoping for benefits from rains.

‘Increased costs’

“The strong prices of the last two years, especially last year, have encouraged producers to hold on to their animals, even in the face of increased costs.”

There has been support from the government for beef producers. Many areas have been declared “agricultural disaster”​ zones. The government of Alberta is allowing producers to use insured forage and annual crops for grazing or feed without sacrificing the potential for an insurance settlement.  

Recently, agriculture minister Gerry Ritz released a list of designated regions in British Columbia, Alberta, Saskatchewan and Manitoba where tax deferrals have been authorised for 2015.

Livestock producers

The move allows livestock producers facing feed shortages in prescribed drought regions to defer part of their 2015 sale proceeds of breeding livestock for a year to help replenish that stock the following year.

However, according to Smith both governments have said that decisions on further financial support, such as disaster payments, will not be made until after the harvest.

Smith added: “We have supported and encouraged the provincial and federal governments in the actions they have taken to help producers. We will be asking them to consider providing disaster relief for the areas that have been affected the most by drought. The extent of a strategy to help producers will depend on the final impacts of the drought.”

Related topics: Livestock, Canada, Beef

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