The Saskatchewan Stock Growers Association is calling on the federal and provincial governments to investigate what's happening.
President Garner Deobald says there's a disconnect between the price consumers are paying for beef at retail and what producers receive.
"When you go into a retail location and see what the price of beef is and work it backwards, there definitely is profit in it. Retailers are profitable, but the packers right now are extremely profitable, and have been for some time."
The SSGA points out that though the pandemic imposed restrictions on packers to optimize worker safety through work spacing requirements, packers were running at near capacity within months after the lockdown was announced.
Deobald says packers have stopped running extra shifts because they have eliminated the backlog from the pandemic, however, the industry is concerned that packers seem to be limiting the amount of product available at the retail level (keeping boxed beef prices high), while fed cattle supplies build which is keeping cattle prices low.
He says producers are feeling exploited, ranchers and feedlots are operating at a loss, forcing many to look at reducing their cattle herd or even exit the business.
"We're gonna see a real contraction in cow numbers, a contraction in the number of producers out there. So for the whole industry right now, it's a situation here that something needs to happen. You know an investigation to find out what the pricing structure really is, and to get a better handle on that is a fair request to government ...to the federal government and to the provincial government."
Deobald says the reduction in herd numbers could result in more grassland being converted to farmland.
"Removing the grass cover also eliminates the habitat that species at risk call home, and releases carbon sequestered in the soil into the atmosphere as carbon emissions."
He adds that the overall situation for producers is amplified now with with inflation, the price of fuel, fertilizer, tax, feed, etc.
"All of those things continue to increase overhead for producers. So when you go into your retail location and see what the price of beef is. You work it backwards there definitely is profit in it. The retailers are profitable, but the packers right now are extremely profitable."
Deobald says while each industry sector has its own frustrations, they agree that price transparency and discovery, packer capacity and pricing spread are the biggest concerns.
The Saskatchewan Stock Growers Association wants to see a pricing investigation and action from the federal and provincial governments to address the significant imbalance we're seeing in cattle and beef pricing markets.Click here to see more...