Rising beef costs loom, but the profits aren’t being felt by Sask. producers

It is no secret beef prices have been high in grocery stores across Saskatchewan over the last year, and with residents set to break out the barbeque in the next few months, things aren’t looking up.

Sylvian Charlebois, the director of agri-food analytics at Dalhousie University, said he expects beef prices to rise in the next six months.

“We are expecting inventories to be much tighter as we go into the spring and summer,” Charlebois said as droughts continue in the United States and Brazil. “For beef lovers out there, our expectations are pretty simple. Beef is actually cheaper now than it will be later.”

And while it may seem like a positive for local ranchers, the profits aren’t being felt by farmers.

The Saskatchewan Cattlemen’s Association said the grocery stores’ prices take a long time to get to ranchers’ pockets.

“What ranchers are seeing right now certainly is an increased price on their product when they take it to market,” said Grant McLellan, CEO of the Saskatchewan Cattlemen’s Association. “But in terms of money going back to our pockets, we are not seeing an increase.”

McLellan said while it is nice to see the prices for cattle higher than ever, the cost of raising the animal has also gone up, leaving a slim margin.

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“Increased input costs such as fuel, food, fertilizer, those continue to go up,” McLellan explained. “I think ranchers from 20 years ago would say, well, these are great prices. But what we’re really seeing is that regardless of the price they get at the market, farmers and ranchers are price takers.

“The prices that they’re seeing are not necessarily indicative of how much it costs to produce that animal.”

McLellan hopes in the future all three phases of producers, grocery stores and consumers can find a balance of profit.

“We want to see producers succeed and we want to see the industry grow,” he said. “But what we don’t want to see is people priced out of quality protein and quality diets.”

Saskatchewan rancher Lee LaClare says he has seen an increase in consumers coming straight to the producer in search of a better deal.

“People are paying attention to the grocery store prices as well and they’re reaching out to their local producers, seeing if they can buy beef locally,” LaClare said. “Buying local and then getting it processed locally as well –just keeping the money in a closer circle.”

LaClare said the problem with selling directly is it is hard to replicate the same number of sales they would get through large feedlots.

And while beef prices will rise, Charlebois does say, however, that he expects pork to remain a very good price for consumers over the next six months, while chicken will remain largely the same.

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