August 23, 2004

Canada's Beef Woes Could Affect Milk Prices

Milk may soon cost more as Canadian dairy producers, like their beef-ranching counterparts, suffer the sting of the mad cow crisis.

"We can weather a small storm, but we can't go on forever like this," said Lenard Crozier, a director with the 750-member Alberta Milk board and a third-generation producer on the family's farm, just north of Edmonton.

When the U.S. border was closed to live Canadian cattle, the export of 80,000 young milk cows, or heifers every year-- roughly 10% of them from Alberta ¨C was affected.

That meant the average heifer price has dropped to $1,000, from about $2,000, Crozier said.

He adds the crisis has also forced the price a producer gets for a litre of milk down about three cents. That works out to about a $30,000 yearly loss for an average dairy farm.

"That doesn't sound like a lot but, on top of that, we also have cull and beef cattle to sell. So you have about another $25,000-$30,000 drop in the revenue from those," Crozier said.

Therefore the Canadian industry has no choice but to work with the federal and provincial bodies which set dairy prices in order to get an increase to help offset these losses, he said, adding consumers will likely be sympathetic.