By Connor Lynch
Canadian beef consumption per capita was down almost 8 per cent in 2015, the largest decline in 37 years, according to the Canadian Cattlemen’s Association (CCA.)
But a drop in consumption isn’t a drop in demand because the supply has also declined, said Canfax manager and senior analyst Brian Perillat. Consumers may be eating less beef on average, but “they’re willing to pay a lot more for that beef.”
According to the CCA, domestic beef supplies were down 6 per cent across Canada.
In Ontario, the tightening supply is changing even more dramatically. From 2005 to 2015, the beef cowherd dropped by 33 per cent, as Ontario’s beef herd shrank by over 100,000 beef cows.
“We went through a lot of tough years,” said Perillat. Excluding the BSE (mad cow) outbreak in 2003 that shut down Canadian beef exports, the beef industry in Canada and Ontario has been hit hard.
Between a rising dollar and feed costs that “skyrocketed” between 2007 and 2009, beef farmers have been struggling to remain competitive with their giant competition to the south.
“The issue is the U.S. We’re integrated with them, they produce 10 times as much as us and they’ve started to expand a lot.”
Many producers “leery of the market” didn’t expand their herds during the price boom of 2014 to 2015 and an opportunity may have been missed, he said. “We’re not expecting that the Canadian herd is going to grow this year.”
Perillat admitted that the price tumble after 2014-2015’s peak may also mean producers dodged a bullet. But he added that it may be a sign of a lack of confidence in the market. “We saw phenomenal, record-high prices and we didn’t see expansion. We need confidence in the industry and the marketplace.”
But at some point, a producer looking to expand needs more land, and that can be a challenge.
In Ontario, producers are struggling to get their hands on suitable land, said Beef Farmers of Ontario’s communications manager, LeaAnne Wuermli.
High land prices, coupled with strong crop prices, mean that beef farmers are finding it hard to compete when it comes time to expand.
Dave Perry, who raises a herd of 130 Black Maine-Anjou beef cattle just north of Kingston, said that fencing is another problem.
A lot of land in his area isn’t fenced, he said. “It’s fairly expensive to fence, and a lot of the farmers rent extra pasture, and if you fence it then someone else might come up and scoop it up the next year.”
Perry added that the BFO is pushing to increase Ontario’s beef herd, but this year’s shortage of hay and pasture is going to make that difficult.
But prices, though down from last year’s peak, are in a normal range, said Seeley’s Bay beef farmer Blair McDonald. “Last year we were getting $3.50 a lb. and now we’re down to around $2 a lb. I would say it’s normal for this market.”