Where’s the Canadian beef? Cost of getting into the business or expanding creating major roadblock

Beef cattle feed in a barn as rising input costs and strong global competition continue to challenge Ontario producers working to meet domestic demand. Beef Farmers of Ontario Facebook photo

By Lee Griffi

Finding the best cuts of Ontario beef in grocery stores has become a recent challenge, although Australian and now New Zealand cows seem to have taken over a good chunk of the market, and at a lower price.

“Unlike the rest of Canada, Ontario is a net importer of beef to meet the demand of our domestic consumers,” explained Beef Farmers of Ontario President Jason Leblond, who has been on the organization’s board for eight years.

“Since before I started, we have been trying to increase the herd size to meet the demand for our feedlot sector.”

The biggest reason the beef industry can’t increase its capacity is the cost of production, which Leblond said makes it difficult for new players to get involved.

“The cost of land, input costs, and strong competition from imported beef and even from other protein sources. We are always working hard to meet consumer demand to the best of our ability,” added Leblond.

“For the cow/calf producers, it might be capital investment, it could be new entrants trying to get their feet under them to get additional cows. The cost of replacement cattle is near the highest they have ever been.”

Leblond said the cost of purchasing a cow is nearly $2,000 higher this year than it was about three years ago. He added that everything needed to produce cows costs more.

“The price of diesel fuel, tractors and other equipment has increased substantially,” he said. “But we are starting to see numbers where we are maybe more so in the black than what we are so used to seeing in the red all the time.”

Leblond has 35 cattle on his farm and admitted he can’t quit his day job. He added that there may be an increase in farmers holding onto female cows for breeding purposes of about two per cent, which will help the industry down the road.

“There are some good signs and some hope, and we hope those signs keep going in the right direction for the next two or three years.”

The Beef Farmers of Ontario are actively lobbying the provincial government to create improved loan guarantee programs to help producers purchase breeders.

“The government is the guarantor for loans given by the private sector to producers to purchase the breeding stock, which gets more cattle into the food chain. The breeding process can take up to three years to reach the processing stage for those fantastic Ontario steaks,” explained Leblond.

Many local, small-town butchers are not suffering from a shortage of beef, including the best cuts such as tenderloin, striploin, or ribeye, mainly because they have a steady supply from nearby local beef producers. Leblond said part of his association’s job is to tell consumers where they can purchase Ontario beef. That includes www.ontbeef.ca

“It’s like a product locator. So, your butcher shop could have a profile on the site, and when someone is looking for beef in Oxford or any other county, they would type that in, and stores would pop up.”

Imported beef from Australia, New Zealand, and even Mexico is cheaper than its Ontario counterparts. Leblond attributes that to something simple — lower production costs.

“Australia has a few different ways of growing its beef,” said Lebold. “The product they bring here is grass-fed and lean, factory beef trim for ground beef and hamburger. Another version is short-fed, essentially an animal that is fed for 90 to 120 days. That gets it to AA quality beef.”

Leblond added that Australia is heavily invested in the Wagyu beef industry, but the majority of exports go to Japan or Korea, where the breed was originally developed. Leblond added that most Canadian beef is graded AAA, and 40 per cent of the income from calves born on his farm ends up in feedlots across Ontario. The rest is exported, mainly due to the demand for what’s left.

“Forty per cent of the value of that animal goes into the export market. The taste here is for striploin and T-bone steaks, roasts and ribs. There are so many other parts of that animal that end up in export markets to use everything and retain as much value from the product.”

The federal government announced in January it was resuming beef exports to China after a years-long ban that had shut down a major overseas market, helping meet demand for cuts that are less popular domestically.

“For us in Ontario, an expanded market is a good thing, and more options for our processors are a good thing. We always treat these announcements with some degree of wait and see because it takes time for people to make purchases and for the product to get there.”

Leblond said he doesn’t want to lay any blame for the high cost of beef on anything in particular, but did say more than 50 per cent of Canadian beef heads south to the United States.

“The U.S. is also a net importer of beef. We are in a global market, and a lot of factors are at play. I would love to get beef cheaper, but I also want to make sure everyone in our supply chain is making money.”