After record-breaking highs over the last year, the price of beef has now stabilized. With the discovery of BSE, or mad cow disease, in 2003, many cattle farmers struggled to turn a profit. Following over a decade of tough times for these farmers, the price of beef rose to a historical high in the last year.
Tim Keys, who has been a cattle farmer for 35 years, believes the overall increase in price was due in part to the size of North America’s cattle herd.
“The North American cattle herd has been liquidated off and it’s the smallest it’s ever been. There was many years in the United States where there was a lot of drought and high grain prices (which) pushed guys to go into grain farming and drop cattle production, because it is quite a bit of work,” said Keys.
Bill Strautman, a communications specialist for the Saskatchewan Cattleman’s Association, agrees with Keys.
“We’ve probably gone from five million cows in Canada in the late 2000s, to I think we’re under four million now. So that’s a 20 per cent drop in animals in Canada. (And) when your supply drops, your price is probably going to go up,” said Strautman.
The price of beef is now evening out.
“They’re not going up like they did in the last six months or a year. In the last year, the prices have really run up. They’ve probably, in some cases, just about doubled, depending on the weight class you’re looking at for the animals. In the last four or five months, it’s probably stabilized now,” said Strautman.
Brian McCarthy, owner of Spring Creek Simmentals, said rising prices are very good for business, but he doesn't expect them to continue.
“It is a commodity market, like oil or any other commodity; there’s people in and out with money. When things get that high that quick, usually there’s some correction in the markets. I don’t see it getting any better. I see it staying strong for some time, but I don’t think we’re going to see it get any higher for a while,” said McCarthy.
According to Brian Perillat, a manager and senior analyst at Canfax, a division of the Canadian Cattleman’s Association, the current value of the Canadian dollar has prevented the value of beef from decreasing substantially since the record high values in the fall.
“Luckily, we kind of track off the U.S. markets, (and) the softening dollar has sort of sheltered us from the price decrease they’ve seen down there. They set the prices so we follow the markets (that) are set in US dollars so, if our dollar softens, it helps elevate our prices relative to theirs,” he said.
But not everyone is celebrating high prices. Big Bob’s Meats owner Kelly Garchinski said the sale of beef in his store has been down because it costs more to buy. This has been a challenge for him.
“It makes it a little bit tougher. We have to really watch our costs, because it seems like prices have been changing every week and you never know what you’re going to be paying from week to week for a product,” he said.
Despite complaints from his costumers, Garchinski said he has been able to accommodate the rise in beef prices.
“We’ve come to kind of learn about it, and we just have to watch our prices when we’re selling,” said Garchinski.
For Keys, the cycle of beef prices isn’t something to get too concerned about. He’s stayed in the industry despite the risk of fluctuation.
“The market is cyclical, it goes up and down. This is the highest prices we’ve ever seen for cattle, but we don’t expect that bubble to stay unpopped. It’s probably just a cycle up; it’s going to come down again,” he said.
