beef price still well below production cost

Just copy a article from the AAC title, as it may be also relevant to GTP and its MIS cattle farms.

http://lfpress.ca/newsstand/News/2008/04/28/5408671.html

Beef producers struggle in midst of price rise rumours
Mon, April 28, 2008
By HANK DANISZEWSKI, SUN MEDIA

If the price of steak and ribs for the summer barbecue is about to go through the roof, nobody has told farmers.

Ontario's beef and pork producers are still dealing with depressed prices and are trying to pare down their herds just to survive.

Gord Hardy, president of the Ontario Cattlemen's Association said higher feed grain costs may eventually drive up meat prices, but for now consumers are still getting bargains and producers are struggling to survive.

"There's a lot of protein on the market right now...There's certainly isn't any profit in the cattle business yet," said Hardy who farms in the Lucan area.

He said farmers are frustrated by a flurry of media reports about rising food prices and warnings from retailers that appear to pin the blame on farmers.

Hardy say beef producers have been trying to get back on their feet ever since the BSE crisis in 2003. Ontario cattle numbers swelled and prices dropped when the border was shut to exports.

Prices started to recover when the borders reopened, but producers were then hit with the rising value of the Canadian dollar, which hurt exports.

Now they are getting hammered by higher feed costs, which they have been unable to recover from the market.

Farmers were only getting $1.20 per pound for their cattle last November. Prices have recovered to about $1.40 per pound but that is still well below the price of production.

Hardy said farmers are holding back on increasing their herds because they don't see any rapid recovery in prices.

"I'm looking forward to that but I don't see it. Beef farmers have been through so much they are reluctant to buy replacement cattle."

Many producers grow their own corn but he said many are so cash-strapped they may have to sell their grain rather than feed it to their herds.

"There's going to be some beef farmers who have always put up their own feed who are now going to sell the grain for cash."

The situation may be even worse for pork producers who are facing a crisis. A $50 million federal government program is paying farmers to kill off 150,000 pigs or 10 per cent of the Canadian herd.

Feed represents 60 per cent of the cost of production and corn prices have shot up from $3.67 to $5.80 per bushel. But Mary Jane Quinn of Ontario Pork said producers are eating much of that cost and are losing about $40 per animal.

"All of the costs have been elevated for producers and they are not getting that value from the market," said Quinn.

Hank Daniszewski is a Free Press reporter.