Thursday this week, the Farm Credit Corporation which finances most of the beef operations that have major debt in the interior, hosted a forum.
Annually, they bring in speakers on topics of concern and interest to the beef industry.
This year the topics were nutrition for cattle and the market outlook.
A good turn out of producers to hear the speakers is good as it shows attention is focused on key factors affecting profitability in the industry.
Anne Wasco, a market analyst, perhaps one of the most experienced people in the business gave her assessment of the market prospects for Canadian beef.
What she had to say may not affect the fractional, smaller market of BC Beef staying in B.C.
Her take home messages from her talk and her handout were:
First, “Increasing protein supplies in North America mean lower prices ahead but margin operators and even cow-calf producers can find profitable pricing opportunities in this market ...”
Second, “With more supply available, demand (including trade) becomes a key piece in the final price.”
Third, “Many factors are out of your control (and changing quickly) — manage the risks you can!”
Anne said the things you cannot control are: global trade (half of our cattle are exported), Mother Nature (hay, grain production, cold weather making for more energy needs by cattle etc.), foreign animal diseases (here and abroad), and the unknown unknowns.
What we can do is: one, have a game plan and be ready for some of the external challenges: two, know our own risk tolerance, and three, protect our equity (bottom line).
Beef demand in Canada at the retail level was off in 2016 over 2015.
Retail prices fell five per cent for beef last year from a peak in the spring.
We export 47 per cent of our beef.
U.S. demand is strong so this could be good for Canadian beef; that is, unless there are barriers to trade set up by the U.S.
The beef industry in Canada is quite consolidated at the packing plant level, as 81 per cent controlled by two companies. In retail, 85 per cent of the business is controlled by five companies.
David Zirnhelt is a member of the Cariboo Cattlemen’s Association and chair of the advisory committee for the Applied Sustainable Ranching program which started at Thompson Rivers University in Williams Lake this January.