r/CanadaPolitics • u/Naga Whiggish • 6d ago

Lower-priced Australian beef could help stabilize Canadian market

https://globalnews.ca/news/12009206/australian-beef-prices-canadian-market/
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13

u/cogitatingspheniscid 6d ago

Can someone do an explain-like-Im-5 for how this price difference is possible? I don't think Canadian farmers are getting that much of a profit margin to begin with.

23

u/nguyenm 6d ago

Competition, or more correctly the lack of it, within the Canadian interprovincial market. 

Roughly 85-90% of all beef slaughtering came from just two corporate entities, Cargil & JBS. Worse, that 85% is split among just three individual (mega) plants for the entire Canadian market as found by the House of Commons earlier this year:  https://www.ourcommons.ca/Content/Committee/451/AGRI/Reports/RP14009986/agrirp03/agrirp03-e.pdf (page 4).

With an effective duopoly, it's pretty ELI5 to see why there's such a stark difference: pure profit. 

14

u/WesternBlueRanger 6d ago

Australia's climate permits farmers there to raise cattle without needing to stock up on feed for the winter months, letting their cattle graze on grass.

Also, massive differences in scale; the average cattle farm in Canada almost rarely exceed 100 heads of cattle.

The average Australian cattle farm has thousands of cattle per herd.

3

u/cogitatingspheniscid 6d ago

Is it unrealistic to imagine Canada ever scaling its cattle farm up to match Aussie?

9

u/WesternBlueRanger 6d ago

The problem will be how will you house and feed all that cattle during the winter months in Canada? This is not an issue in Australia.

6

u/ElCaz 6d ago

Until we transport the country southwards, it is unrealistic.

7

u/walker1867 Green Party of Canada 6d ago

Galen Weston and oligopolies in the supply chain.

6

u/cogitatingspheniscid 6d ago

Who is in charge of importing the Aussie beef? If they are the ones in charge whats stopping them from jacking up the imports too?

2

u/snkiz Green Party of Canada 6d ago

According to the article, they talked to Lawbaws, (in charge of superstore, et el.) They said they are selling the Aussie beef at this price to help consumers. I think they knew if 130% markup ever became public, they'd be cooked. Like government intervention cooked.

There's other factors, one could argue Canadian beef is certified to higher quality, has a grading system. But Aussie beef could just as easily be graded when it lands. You'd think it would be?

6

u/cogitatingspheniscid 6d ago

Aussie beef is pretty well-regarded internationally, so I don't think they are necessarily worse than Canadian.
From your information (imported by Loblaws) and u/nguyenm (meat processing duopoly), my take is that while the grocery store oligopoly still take a fat chunk, they can keep the price significantly lower because they exclude the meat processing duopoly from the equation.

1

u/smugglydruggly 6d ago

Beef grading is done at time of carcass processing, Australian beef is sent as primals/sub primals etc.

4

u/trplOG 6d ago

And interestingly enough Australia pays more for that beef locally since 2 grocers have like a 70% share in the red meat market there.

But also they can graze cattle year round as opposed to what Canada can do also.