Consumers in Canada are facing the prospect of higher prices for their favorite steaks as the country grapples with the impacts of consecutive years of severe drought in key cattle-producing regions. The dry conditions, spanning from southern Alberta to water-scarce east Texas, have forced ranchers to downsize their herds due to a lack of grass for grazing, resulting in a significant reduction in overall beef production and an upward push on retail beef prices.
John Wildenborg, owner of Calgary specialty butcher shop Master Meats, expresses concern about the inevitable rise in steak prices. "Prices are definitely going to go higher, no ifs, ands, or buts about it," he warns. Wildenborg notes the current challenges, stating that he's paying 40% higher wholesale prices compared to the same period last year. This surge in prices is unusual for the slow time of year for beef.
The drought impact on the beef industry is part of a broader trend, as Lance Zimmerman, a Kansas-based senior beef analyst with Rabobank, points out. Producers in both Canada and key cattle-producing regions of the United States are facing the consequences of two 'hundred-year droughts' within a decade, compounded by the global pandemic and associated challenges. This has led to a prolonged period of hardship for cattle producers, resulting in liquidation – the sale of a larger proportion of heifers and cows for slaughter rather than herd expansion.
In Canada, the national cattle herd has been declining for years, reaching its lowest level since 1989 in 2023. South of the border, the United States is experiencing a similar contraction, with the national cattle herd dwindling to the smallest number since 1961. The shrinking cattle population translates into reduced beef production, fewer exports, and higher retail prices for consumers.
Ranchers, such as Brad Osadczuk in southeast Alberta, are grappling with the severity of the drought. Osadczuk had to send his cattle to Saskatchewan for grazing due to depleted grassland on his own property, marking the worst drought year he has experienced. Many ranchers in the area have been avoiding replacing cows for at least five years, leading to smaller herds.
Despite the hope that the current drought cycle may end soon, experts caution that cattle numbers cannot rebound overnight. The new era of higher beef prices is anticipated to persist for several years. Anne Wasko, a market analyst with Gateway Livestock, emphasizes the need for moisture to reverse the trend. With North American cattle and beef supplies expected to remain tight until at least '26, the impact of the drought on the industry is likely to be a prolonged challenge for producers and consumers alike.
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