(Calgary) Beef could lose its popularity on Canadian tables because of the droughts raging in the west of the North American continent.
Usually, the demand for beef is always high in Canada, even during an economic crisis. However, this could well change in the more or less near future.
From southern Alberta to eastern Texas, ranchers are reducing the size of their herds because of the scarcity of grass. As a result, beef production has been reduced, thereby driving up prices in grocery stores and restaurants.
“Even though it’s the slowest time of year for beef, prices haven’t fallen since Christmas. I pay [mes produits] 40% more expensive than I did at this time last year,” says John Wildenborg, the owner of a butcher shop in Calgary, Alberta.
Food prices have risen significantly over the past three years due to COVID-19 and inflation. But despite the slowing of the inflationary spiral in many food categories, the price of beef has not followed suit, due to droughts.
“When we talk to producers, whether Canadian or American, they say they have gone through, over the last ten years, two of the worst droughts of their existence,” underlines Lance Zimmerman, an analyst at Rabobank. Add in the pandemic and everything else, and the last 10 to 15 years have been particularly trying for breeders. This led to numerous liquidations. »
A liquidation occurs when a breeder decides to drive a large part of his herd to the slaughterhouse rather than attempt to grow it. Several factors can lead him to make this decision, including expenses, lack of labor, high interest rates and, of course, weather conditions.
PHOTO BERNARD BRAULT, LA PRESSE ARCHIVES
A herd of cattle crossing Highway 97 between Kelowna and Sun Peaks, British Columbia
In Canada, the size of the national herd has been declining for several years. In 2023, it fell by 1.5% to reach 3.66 million animals, the smallest total since 1989.
In the United States, the data tells an even more dramatic story. The number of livestock fell to 28.2 million in 2023, the most since 1961.
The situation draws a simple equation: fewer animals equals less meat, which leads to a drop in exports and a rise in retail prices.
“Unfortunately for consumers, prices will continue to rise,” predicts Mr. Zimmerman. And according to our estimates and a US basis, the price is expected to increase by another $1.50 over the next few years. »
In southeastern Alberta, near the village of Jenner, rancher Brad Osadczuk had to move his herd to land he rented in eastern Saskatchewan in order to better feed them. His own pasture was completely depleted by drought.
“It’s the worst drought of my adult life, and I was born in 1971,” he says. Our meadow will never become green again. »
Mr Osadczuk was able to reduce the size of his herd. Some of his colleagues must have imitated him over the last five years.
“We have been facing drought conditions for a long time. In our area of Alberta, the herds are quite small. »
And even if weather conditions improve, ranchers cannot get their act together overnight. This is why the price of beef will remain high for some time to come.
“This will not be resolved in the short term,” warns Mr. Osadczuk. A cow born today will take four years to reach the other end of the food chain. »
Anne Wasko, a livestock market analyst, believes the North American beef supply will remain precarious. And the future will depend on Mother Nature.
“Supply is expected to decline further in 2024, 2025 and, arguably, through 2026,” she says. We need rain to turn things around. »