November 15, 2007

High dollar worries Ontario beef farmers

The rising Canadian dollar Canadian dollar has been pummelling Ontario's beef manufacturing and agriculture industries.

Ian McKillop, president of the Ontario Cattlemen's Association, says the beef producers are in "grave distress'' as a result of the soaring loonie (Canadian dollar coin), which makes beef more expensive in the United States market and US beef cheaper here.

Other factors include mad cow disease, high feed grain prices due to ethanol and reduced production of some major beef producers such as Cargill Better Beef in Guelph.

It is, in short, a perfect storm for beef producers, he said.

McKillop says they are losing more than C$400 on every head of cattle they sell. Overall, they have has lost over C$100 million over the past six months with farmers chewing up most of their savings from mad cow disease.

Unlike many other agricultural sectors -- chicken, egg, and dairy farmers -- there is no supply management system in beef to keep the cattlemen afloat, says McKillop, adding it is not clearly a sustainable situation.

Nor is this a trifling concern. Beef is a C$1.2 billion industry in Ontario, with some 19,000 producers in the province. Directly or indirectly, they employ another 13,000 people.

If the beef producers continue to lose, McKillop says "it would be like losing an auto plant."

McKillop is appealing for government help for "transitional assistance'' to help beef producers hump the current crisis as well as a longer term programme that would provide government subsidies to producers when the price of beef price falls below a certain level.