Industry changes bankrupting cattle farmers: report
Cattle farmers are going bankrupt across Canada due to historically low prices tied to a highly integrated meatpacking and retail sector, the National Farmers Union says.
In a 32-page study released Wednesday, the NFU says prices, going back to the 1930s, were relatively stable, but things changed after 1989.
Today, Canadian farmers and independent feeders are receiving half as much — in dollars adjusted for inflation — as farmers and feeders received in the 1940s, '50, '60s, '70s, and '80s, the report said.
After 1989, the North American Free Trade Agreement opened up markets in both Canada and the United States, but also allowed American multinational companies to dominate the meatpacking industry, it said.
"As we've moved to fewer people owning the plants, fewer plants, captive supply and vertical integration, the power shift is so much toward the packers," said Darrin Qualman, director of research for the NFU.
According to Qualman, that shift in power has led to lower prices. Meatpackers are paying feedlots half what they were paying for cattle in decades past. In turn, feedlots are paying cattle producers half of what they used to get for cows and calves.
The NFU would like to see federal legislation that would prohibit meatpacking plants from owning or controlling cattle, Qualman said.
However, Brad Wildeman, the president of the Canadian Cattlemen's Association says that's too simplistic a solution to the problem of low cattle prices.
Many meatpackers own cattle to make sure they can run their plants at full capacity, he said, adding that NAFTA has helped, not hurt, Canadian producers.
He said the free trade deal is responsible for the growth in the feedlot industry in Canada.
"Prior to 1990, our feeding sector was pretty small. So the ability to feed cattle here and increase slaughter capacity for those cattle was pretty significant to our industry and has helped us quite a bit," he said.
More worrisome is the trend of growing protectionism in the U.S., Wildeman said.
If the Americans use country-of-origin labelling to restrict Canadian exports of live cattle, it will push down prices even further, he said.