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HomeMy WebLinkAboutClinton News Record, 2016-09-21, Page 1414 News Record • Wednesday, September 21, 2016 Beef prices to drop at grocery store because of cattle price drop John Miner Postmedia Network What went up came down with a dramatic crash. After soaring to record highs in the past couple of years, cattle prices have plunged, spreading red ink through Ontario's third larg- est agricultural sector. "What goes up comes down and it's coming down hard," said Kevin Grier, a food market analyst based in Southwestern Ontario. The fallout from the cattle price drop is expected to continue to push beef prices lower at the grocery store. Grier said farm operators who produce calves on their farm and sell the animals to someone else to finish won't be making nearly as much money as they were before. But it's the ones who buy the calves and feed them who are at risk of losing their shirts, he said. "The guys in the London region who are feeding cat- tle are hard hit big time because they bought high priced calves and now they are selling them into a very, very depressed market," Grier said. Jim Clark, a Glencoe -area beef producer and executive director of the Ontario Cattle Feeders' Association, said the losses for cattle feeders are now ranging from $500 to $800 for every animal they market with most of the losses closer to the $800 end. "We've seen a significant decline in the value of the animals we have," Clark said. Insurance programs will soften the blow, but no pro- gram will cover the loses producers are facing, he said. Many beef farmers are well established with a strong land base and will be able to hang on, but there will be some who decide to get out of the business, Clark said. "My fear is for older pro- ducers with nobody behind coming along. It's easy to say, 'I will do something else: That's what scares me; people will lose heart," he said. Brian Perillat, senior analyst with CanFax, a divi- sion of the Canadian Cat- tlemen's Association, said market ready cattle prices peaked last June and have been dropping ever since. They are down 37 per cent from the peak. "There have been some huge swings. It has been a tough run, especially for the feedlots," Perillat said. "They have seen the biggest rally in history and now they are seeing one of the biggest drops in history." The steep rise in cattle prices can be traced back to the U.S. drought in 2011 and 2012 that forced Amer- ican producers to liquidate their herds. That triggered a shortage of beef and higher prices. At the same time, pork supplies also were cut in the U.S. because of PED, a disease that killed millions of pigs. "It created a perfect storm," said Perillat. Now, cattle supplies have recovered and there are huge amounts of pork available, he said. For consumers, beef prices have dropped about three per cent compared to a year ago. Grier expects that trend will continue with retailers featuring more beef specials on the front of their weekly flyers. "Retailers know that beef is important. If consumers have beef in their basket they will have a lot of other stuff in their basket too," Grier said. BUSINESS DIRECTORY adver ise in this MEHREE '3)llEICCUOLEW Please call DD ;©ht©m Dur 13LIE Imins Is built on SERVICE I-Lii AT1i LAIR CONDITIONING - ELECTRICAL GAS FIREPLACES* AUTOMATIC GENERATORS JEFF WISE 262 ByIIQliI Road. Clinton = 519-482-7082 To advertise h this Mi i iHMO Si D)llEMCUOTEW. Rease call Dawn :ohnotom. Daae 9zadeetit CONCRETE FORMING COMMERCIAL r RESIDENTIAL • Nimbi iOi i Flrn-or flnLihirrg, • Cream -Tank; +Sandwich Walks FREE. ES TTMATES [MVO I -1I LIQ 519-523-9971 Fay 523-9604 5;` Dave Bernard TEE SEBVICE • Bucket Truck Service ree Trimming/Removal • • Stump Grinding • Free Estimates UP?' :. 1998 CLINTON, ON Oil 9-482-3976 MKILLP FNSUF.ANCL CJr.4reLN`r AUTO 1 HOME 1 FARM 1 COMMERCIAL 154 High Street, Clinton, ON kim@mckillopmutual.com Ph: 519-482-99761 Fax: 519-482-9815 Cell: 519-525-9976 www.mckillopmutual. com