SASKATOON -- A new report by the National Farmers Union is painting a bleak picture for Canadian cattle producers.
The report released Nov. 19 states that, adjusted for inflation, Canadian farmers and independent feeders are receiving half as much for their cattle as they did from the 1940s through the 1980s.
"These half-price cattle are bankrupting family farmers across Canada and creating the most severe crisis in the sector since the Great Depression," according the 128-page document.
It says that between 1942 and 1989, cattle prices more or less kept pace with inflation. The average price for the 47-year period was $174 per hundredweight -- double the recent average.
But during the past two decades, price increases for other goods have been twice as large as the price increases for live cattle, the report says.
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It says if fed cattle prices had kept pace with other prices, cattle today would sell for approximately double their current values.
Packer-retailer advantage
Report author Darrin Qualman says there's a correlation between increased concentration of ownership among beef packers and falling prices. Retailers also are taking an increased share, whittling away farmers' share of the grocery store beef dollar, he says.
"Packers and retailers have done a number of things over the last decade or two to make themselves more powerful -- and power determines the distribution of profits in the system," Qualman says.
"So as packers and retailers have made themselves more powerful, they've made themselves more profitable and as such made farmers relatively less profitable," he says.
The reported notes that few of the packing plants that existed in the 1970s or '80s remain today and the current big plants were opened in 1989 or later.
"Not only are the plants new and bigger, they also are fewer, and as a result, many cities and some provinces no longer have a major beef plant," the report says.
It says the packing industry in Ontario has gone from 17 medium-sized federally inspected plants in 1974 to just three today.
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Recommendations
The report makes 16 recommendations, including banning packer ownership and control of cattle as well as creating farmer-owner packing capacity by increasing the number of packing plants and companies.
Qualman says the solutions could save the industry.
"There's a certain lack of hope there I think just because people have been so beaten down financially," Qualman says. "The fact that for those 50 years we managed to pay farmers twice as much as we're paying them now should leave one to be very optimistic that there's large potential to increase the farmers' take-home pay."
