Cattle in stock yard - Photo credit to ABP

By Curtis Galbraith

Looking For Insight

ABP looking into why meat prices are going up while cattle prices are going down

Nov 26, 2021 | 2:18 PM

Alberta Beef Producers says it is worried about what it terms “a growing disparity in the supply chain.”

In other words, beef prices for consumers are going up while the prices ranchers are paid for their cattle are going down

ABP board chair Melanie Wowk says officials are not sure why this is happening as groups like hers do not get much insight into packer and grocery store profits.

“Obviously, the consumer market seems to be still buying beef at that price. I don’t know what the expenses are at the packer level, but I’m assuming that this is just a straight economic driver that the consumer is able to afford right now, so they are taking advantage of that.”

Wowk says a lot of producers are worried about all this going on when they are already dealing with drought and the pandemic. She adds cattle prices have stayed stagnant over the last few years while things like the drought and carbon tax mean costs have gone up.

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Some people have suggested that there are too few plants controlling beef processing

Wowk noted the Cargill and JBS plants in southern Alberta process 80 per cent of Canada’s beef, so there is what she calls “some concentration there.”

She adds, ABP has asked the provincial government about opening more plants in Alberta.

“Even medium-sized plants to create a little bit more competition, but also to allow producers to be able to choose where their product goes,” she explained.

Wowk says the possibility of a strike at the Cargill plant in High River would make things worse because if workers are off the job, it would cause a backlog of cattle comparable to what happened at the start of the pandemic. She adds this depends on if there is a strike and how long it might last.

A release from ABP is asking the industry to “come together to find a solution to create equity and profitability throughout the entire supply chain.”

Wowk says it is hard to know what to do as the cattle business operates as a free market.

“I don’t think we can ask the government to come in and ask those companies to stop making the profits that they are making because it just goes against our free-market industry.”

“I think what a lot of producers are suggesting is that we just increase the amount of competition in this province and, potentially, across the country.”

Wowk confirmed cattle herds have been shrinking since 2015, and with most producers in Alberta being above 50, this plus drought and lower profits and other hardships may mean some will sell their herds and leave the business.

Wowk also wants to thank consumers for standing behind the industry and that ABP wanted to let them know what was is happening with primary producers and that ranchers are not seeing the profits other parts of the beef industry are seeing.