Soaring grain costs could mean pricier beef, Alberta farmers say
The rising costs of food staples worldwide may boost the price of Alberta steaks by the fall, farmers warn.
The problem, in particular, is the soaring cost of grain, partly as a result of the increased popularity of biofuels. Canadian farmers feed their cattle grain to fatten them up before they go to the slaughterhouse, and doing so is becoming increasingly expensive.
Ted Haney of the Canada Beef Export Federation said feeding grain gives Canada a competitive advantage on the world market, but the rising feed costs will soon be passed on to the consumer.
Feeding cattle the expensive grain "means the final product, the animal, is more costly, and the feedlot operator needs a higher price in order to recover their costs," he said.
Haney said consumers could be feeling the pinch when purchasing their preferred slab of beef by this autumn.
Farmers facing tough choices
The rising grain prices are also forcing farmers to make tough choices about whether to dig deeper into their wallets for the feed or keep their cattle for another year, with the hope grain prices will drop.
"If there's any fear of running out of gas for our SUVs, we're willing to burn food in them. And now we're starting to see the consequences of that," said Erik Butters, chair of the Alberta Beef Producers.
Butters, who ranches near Cochrane, said these consequences are posing a real difficulty for cattle farmers.
"Well it's hard. It's very difficult for the cattle sector to respond to the double whammy of escalating dollar and escalating feed costs," he said. "You know, we could sort of manage one of those, but when you get hit with them both at the same time, it's a difficult situation."
Butters described a double-edged sword for the farmers. If they purchase the increasingly expensive grain for feed, their costs, and the price to consumers, grow.
But if they choose not to feed their cattle grain, they lose their competitive advantage and are stuck keeping the cattle on a grass diet for another year.
"You have to do without a year's income" if you decide to let the cattle graze, Butters said. "And of course, to say goodbye to a paycheque for an entire year, especially in a very difficult situation to start with, is not an easy thing to do."