Sask. ranchers call for investigation into cattle and beef pricing

The Saskatchewan Stock Growers Association is calling on the federal and provincial governments to investigate cattle and beef pricing markets as concerns of a widening price gap grow.

“Profitability has eroded away to the point right now where so many of us are up against it," Garner Deobald, a rancher near Hodgeville and the president of the Saskatchewan Stock Growers Association said Thursday.

Deobald wants to know where the money in the beef industry is going due to what he says is an “imbalance” in the cattle and beef pricing markets, which has been growing in recent years and was further exacerbated since the pandemic.

He knows what he sells his cattle for, and he knows what a pound of ground beef costs at the grocery store, but the math isn’t adding up as he and many of his peers face another tough year with little to no profits.

“We know there’s a huge discrepancy between that, and to ask for an investigation I think is fair and reasonable just to understand where is the money, or the profits, ending up at this point and time," Deobald said.

Whether it's the retailers themselves or slaughterhouses, or other stops along the supply chain, Deobald wants answers.

According to Statistics Canada, food prices were up 8.8 per cent from May 2021, with the price of beef alone increasing by 11.2 per cent year-over-year.

In a news release calling for the investigation on Tuesday, the association said retailers and slaughterhouses are seeing strong profits, but the Retail Council of Canada says any evidence they’ve seen is to the contrary.

A recent study from the retail council looking at Ontario Beef and Cattle pricing between 2016 and 2021 showed the farmer share of the retail beef value dropped from 41 per cent to 39 per cent over that time, while retailer share of beef value dropped from eight per cent to two per cent as the packer share increased from 51 to 59 per cent.

"Retailers have not been fully passing along the increased beef cutout costs. Instead, retailers' margins on beef have likely been shrinking over the past two years, at least," a comment in the report read.

Deobald said meat packers in the United States aren’t scheduling extra shifts to meet the demand at the grocery for beef, which limits the product available on the shelf. In turn, that keeps retail prices high while allowing feed supplies to build up and drive cattle prices low.

Depleted grasslands from last year's drought, along with escalating costs of fertilizer and fuel that have doubled in some cases, has only added to the concern of long term sustainability for ranchers as more could leave the profession altogether.

"There’s going to be producers that will exit the business this fall and cow numbers will decline. I have no doubt about that.”