While prices at grocery stores and restaurants are increasing due to inflation, those costs aren’t equating to dollars in the pockets of primary producers. This, combined with the global pandemic and extreme weather events of the past year continue to wreak havoc on the cost of production, and underscore the growing disparity along the supply chain.
This isn’t a new issue for beef producers, and it’s a priority for Alberta Beef Producers (ABP).
“With high demand from export markets and prices increasing at the consumer level, beef farmers and ranchers need to see balance in the industry. As a beef producer in Alberta, I would like to see the entire beef production chain become economically healthy and to achieve a fair profit distribution amongst sectors,” says Dr. Melanie Wowk, Chair, ABP.
A recent Calgary Herald article referenced the record high cattle prices set in 2015. Following that peak was a significant plummet in prices and producers have dealt with varying levels of market volatility ever since.
“The record high prices spurred on herd expansion, mainly in the United States. Growing cattle numbers and limited changes in processing capacity, combined with other issues like the major fire at a U.S. processing plant and widespread COVID disruptions, created bottlenecks for the supply chain,” says Brian Perillat, Manager and Senior Analyst, Canfax.
This has resulted in cattle prices averaging over 25 percent lower than the highs we saw in 2015, despite record high beef prices.
In addition to collaborating with the provincial government on competitiveness research, ABP is also working on a thorough supply chain review. From barriers facing local processing facilities to large scale processors – the issues facing each level of processing are diverse and have impacts that are felt right down to producers.
The industry needs to come together to find a solution to create equity and profitability throughout the entire supply chain.