Template-Type: ReDIF-Article 1.0

Author-Name: Derek Gerald Brewin
Author-Workplace-Name: University of Manitoba


Title: Policies Affecting the Efficiency of Beef Production in Alberta: A Supply Chain Analysis 

Abstract: Shoppers face high beef prices at the supermarket, but those prices are not a reflection of what 
Canadian farmers and ranchers earn from their cow-calf herds. In the past 30 years, the average
beef producer’s operating margin has never reached $50,000, despite the fact that the average
beef farm’s asset base stands at more than $2 million.
Better access to export markets, including the U.S., South Asia and North Africa, would help to
remedy the producers poor returns. Export prices would need to cover production costs, the
largest of which is feed for the producers’ cattle herds, accounting for 77 per cent of the average
ranch’s cash costs.
As of July 2023, Alberta’s herd consisted of 1.77 million beef and dairy cows. With demand for
livestock-derived food expected to jump by 38 per cent in the next 30 years, Canadian cattle
ranchers need to take advantage of this global increase through freer trade. Canadian beef
can remain competitive globally if the supply chain accesses world markets beyond the U.S.,
especially in developing countries where consumer incomes are increasing. The industry also
needs investments in research, farm extension and supply chain co-ordination from national
and provincial self-funded producer groups.
Producers must look outward to global trade but be ready to capture new innovations at home.
The dominant economies of scale are available to beef processors and finding savings is difficult
for farmers and ranchers. However, there is potential for the supply chain to see savings from
new technology, which is why investment in continuing support for ranch-level production
research is necessary. Producers also need to focus on national co-ordination aimed at protecting
trade access and responding to trends in consumer demand for beef.
Any new industry policies must also consider key factors that currently affect market demand and
expansion including: changing consumer preferences globally, the welfare of animals raised for
slaughter and the effects of greenhouse gas emissions on supply chain sustainability. As some of
the output and byproducts of the grain production sector provide feed for cattle, policies meant
to support the grain sector may be indirectly influencing the beef sector significantly — for good
and bad.
Infrastructure required for worker safety, animal welfare improvements or improved food safety
also adds to the cost of the beef supply. Protectionist trends and increased tariffs pose a threat
to the supply chain because they too can create new costs. This is why access to foreign markets
is crucial for producers, along with continued investment in research, sector-wide co-ordination
to support market access and reviewing crop support to ensure livestock producers are
compensated if grain policy changes harm them.
Although live animals and much processed Canadian beef are exported to the U.S., fostering
good trade relations in Asia and Africa is vital, given the growth in incomes and consumer
demand for beef that is predicted for those regions.
Free trade is the basis of good agriculture policy and any move towards protectionist policies and
higher tariffs is the biggest threat for new costs in the supply chain. Canada’s beef sector requires
low-cost access to foreign markets, making free trade policy the single most important policy
focus for the sector.



Journal: The School of Public Policy SPP Briefing Papers
Volume: 17
Issue: 7
Year: 2024
Month: June
File-URL: https://www.policyschool.ca/wp-content/uploads/2024/05/JSC32-Policies.Beef-Prod.June5_.pdf?mkt_tok=MTYxLU9MTi05OTAAAAGTiBofkRiK-Kk0jaspLTJwb39Z_3hAmG-nCIYSdHpCQ7tzz4sF1FX8UpAA04Iu7nTuwoVs8cKxq6lfCrW0wRx_D4kr4_Ccl0Sk7WI9pnLwl3h7HNoF6w
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Handle: RePEc:clh:briefi:v:17:y:2024:i:7