LAKE FRANCIS, Manitoba: Canadian rancher Dianne Riding strode across her brown pasture near Lake Francis, Manitoba, as record-breaking heat and drought left her with too little grass or hay to feed her cattle.
“As my herd goes down, so does my income. It is gut-wrenching,” she told Reuters, after selling 40 percent of her herd, or 51 heads, at auction in July.
Ranchers and cattle experts stress that North American cattle production is expected to be negatively affected by such liquidations, reducing beef supplies and increasing consumer prices.
The drought has affected much of western North America, from western Canada to California and Mexico.
According to industry group Alberta Beef Producers, Canadian ranchers are likely to cull 20 percent to 30 percent of their herds this year, while in the U.S., the world’s third-leading beef exporter, analysts expect less impact, as cattle herds are more spread out.
In Chihuahua, Mexico, the number of breeding cows dropped from 1.2 million in 2019 to some 700,000 because of drought, said Fernando Cadena, head of ranching company Carnes Ribe.
In a recent earnings call, leading U.S. meat company Tyson Foods announced expected operating margins to fall next year because of herd liquidations, but results should still be strong, said officials.
“When we liquidate cow herds, the supply impacts last years,” said Mike von Massow of the University of Guelph, Ontario, as quoted by Reuters.
Consumers will also feel the pinch, analysts stressed. After a 2014 drought, beef prices in Canada rose by some 25 percent over the following year and remained high for at least two years, von Massow noted, citing Statistics Canada data.
Beef prices are likely to increase as early as this fall, due to the higher prices for feeding cattle, he added.