January 8, 2012

 

 

Rising beef production costs and shrinking cattle supply will make the coming barbecue season an expensive one for area residents and people across the continent.

 

The USDA reported recently that 91 million head of cattle were being raised in the country on January 1, down 2% from last year and the fewest since 1952. Drought conditions and skyrocketing feed prices are being blamed for the drop in the cattle supply.

 

And things are not a whole lot better in Canada, says Kim Sytsma, Leeds County representative on the Ontario Cattlemen's Association.

 

"Cattle numbers of mom cows in North America are shrinking," said Sytsma, who is also president of the Leeds Federation of Agriculture.

 

She cites a number of factors behind this herd decline, including the past decade's bovine spongiform encephalopathy (BSE) or "mad cow disease" crisis, the aging of cattle farmers and increased grain production.

 

The surge in biofuel production has increased demand for grains such as corn and barley and made them more expensive.

 

A recent study, entitled "Impact of Canadian Ethanol Policy on Canada's Livestock and Meat Industry, 2012," was recently released in Calgary by the George Morris Centre. It blames ethanol production for a US$130-million rise in annual costs facing livestock producers across the country.

 

Not only are grain prices going up because of the increased demand, but as more farmers turn to producing grain, there is less room for cattle farming, said Sytsma, who raises beef cattle on an Athens-area farm with her husband Charlie and son Will.

 

She calls ethanol production a "mixed blessing," because, in addition to creating higher feed costs, it does yield a high-protein distiller's grain for cattle feed that is a by product of the manufacturing process.

 

Also, notes Sytsma, many cattle farmers also grow grain, and are thus benefiting from the higher prices. Some cattle farmers are opting for a buy-local strategy in order to cut out transportation costs.

 

That is working for the Sytsmas, who sell their beef directly to two local grocery stores in Lyndhurst and Westport. But the buy-local option is not for every producer, said Sytsma. "It won't help everybody, but some people can benefit," she said.

 

Neil Kudrinko, whose independent grocery store in Westport, Kudrinko's Country Grocer, is one of Sytsma's buyers, said there is "still some good value" in beef prices today, but the market is definitely pointing to a large increase in price later this year.

 

A rise in global demand for beef, coupled with higher energy and feed costs, are some reasons for the increase, said Kudrinko, a former Green Party provincial candidate in Leeds-Grenville.

 

Depending on the type of meat cut, wholesale beef prices were up between 10-37% in January, compared to prices at the end of 2010, according to Agriculture and Agri-Food Canada.

 

Consumer prices for fresh and frozen meat in 2011 were about 6.9% higher than in 2010, according to Statistics Canada. In the US, beef prices were 11% higher and are expected to go up another 5% in 2012.