Canadian bison markets continue to grow, but a limited supply of slaughter animals is a key hurdle to further expansion.
Dean Andres, a founding partner with Alberta’s Carmen Creek Gourmet Meats, said markets for premium bison products could expand significantly, but packers and marketers are concerned by the industry’s ability to ensure a consistent supply.
Demand for slaughter animals is high, prices are strong and marketers are anticipating increased competition for finished animals, Andres said.
Canadian supplies are unlikely to rebound quickly, he added.
Read Also
Hogs’ transport stress called costly
Poor trailer design and transportation stress are killing pigs and costing the pork industry millions of dollars in penalties, meat quality downgrades and failed welfare audits, according to research by a federal scientist.
Bison numbers have been falling for the past few years and producers, encouraged by high prices, are expected to expand breeding herds.
That means more heifers will be held back as replacements and fewer will be sent to slaughter.
Andres said the demand for Canadian bison has grown beyond the supply.
“It’s going to be a tough year for packers and marketers … because the supply is going to be very tight, margins are going to be thin and … (slaughter prices) are probably going to be higher than they should be,” he said.
“I think we will find the supply … but for the industry as a whole though, it’s going to be a challenge.… Right now, there’s not enough bison for all the marketers out there and that means some of the marketers are going to have to go away because obviously, you can’t turn the bison supply around overnight.”
Despite looming supply concerns, the bison industry is bucking a market trend that has affected most other segments of the livestock industry.
Unlike the beef and pork sectors, the bison industry is enjoying strong prices and producers are encouraged to expand production.
Andres said the industry will need to manage its inventory carefully to balance herd expansion and the needs of the slaughter industry.
Even with measured growth, it could be five to seven years before the slaughter numbers return to 2008 levels, he added.
Andres said Canada’s breeding herd needs to expand by 10 to 15 percent per year for several years to satisfy needs of packers and marketers.
“You want to make sure that it (expansion of herds) is sustainable and you want to make sure that the heifers being kept are good quality ones,” he said.
“We also know that when we kept 100 percent of our heifers back in the 1990s, there were some really crappy animals out there.”
Andres said Carmen Creek is one of several companies that has built a reputation for delivering high-quality, premium bison to high-end meat markets in North America and Europe.
Despite the impact of a global economic recession and the closure of nearly 300 high-end restaurants in the United States during the past two years, demand for high end, hormone- and antibiotic-free meat is still strong and the potential for expansion is significant.
Carmen Creek slaughtered 7,500 head of bison in 2009 and is hoping to increase slaughter numbers to about 8,500 in 2010.
European buyers comprise 43 percent of the company’s sales, followed by the United States at 40 percent and Canada at seven percent.
Mark Silzer, president of the Saskatchewan Bison Association and the Canadian Bison Association, said herd numbers have been falling during the past few years because producers who lived through tough times in the early part of the decade are eager to cash in on high slaughter prices.
“Certainly we haven’t seen any building in the herd because heifers have been gaining value and meat prices have been climbing.”
Regional droughts and feed shortages have contributed to reduced breeding herd numbers in parts of the West, he said.
Some established producers are also jumping at the opportunity to get out of the business now that prices are high and equity is growing.
That has opened the door for new producers and highlighted the need for an expansion in breeding numbers.
“We’ve been in this industry since 1994 and I truly believe that there’s never been a better time for people to get into this industry,” Silzer said.
“The economics look really good right now. Breeding stock prices are realistic, based on where the meat price is … and when you look at demand for a long time out, I think we’re looking at profitable, sustainable prices.”
Doug Griller, a long-time bison producer from Quill Lake, Sask., agreed, saying despite supply challenges, the industry is poised for growth and profitability.
“Since I got into the business, this is probably the most rational time I’ve seen,” he said. “In the 1990s, we had a lot of fun buying high-priced animals and selling high priced animals…. Today, the business is driven on the basic market fundamentals of supply and demand. It’s made businesspeople out of bison producers.”Canadian bison markets continue to grow, but a limited supply of slaughter animals is a key hurdle to further expansion.
Dean Andres, a founding partner with Alberta’s Carmen Creek Gourmet Meats, said markets for premium bison products could expand significantly, but packers and marketers are concerned by the industry’s ability to ensure a consistent supply.
Demand for slaughter animals is high, prices are strong and marketers are anticipating increased competition for finished animals, Andres said.
Canadian supplies are unlikely to rebound quickly, he added.
Bison numbers have been falling for the past few years and producers, encouraged by high prices, are expected to expand breeding herds.
That means more heifers will be held back as replacements and fewer will be sent to slaughter.
Andres said the demand for Canadian bison has grown beyond the supply.
“It’s going to be a tough year for packers and marketers … because the supply is going to be very tight, margins are going to be thin and … (slaughter prices) are probably going to be higher than they should be,” he said.
“I think we will find the supply … but for the industry as a whole though, it’s going to be a challenge.… Right now, there’s not enough bison for all the marketers out there and that means some of the marketers are going to have to go away because obviously, you can’t turn the bison supply around overnight.”
Despite looming supply concerns, the bison industry is bucking a market trend that has affected most other segments of the livestock industry.
Unlike the beef and pork sectors, the bison industry is enjoying strong prices and producers are encouraged to expand production.
Andres said the industry will need to manage its inventory carefully to balance herd expansion and the needs of the slaughter industry.
Even with measured growth, it could be five to seven years before the slaughter numbers return to 2008 levels, he added.
Andres said Canada’s breeding herd needs to expand by 10 to 15 percent per year for several years to satisfy needs of packers and marketers.
“You want to make sure that it (expansion of herds) is sustainable and you want to make sure that the heifers being kept are good quality ones,” he said.
“We also know that when we kept 100 percent of our heifers back in the 1990s, there were some really crappy animals out there.”
Andres said Carmen Creek is one of several companies that has built a reputation for delivering high-quality, premium bison to high-end meat markets in North America and Europe.
Despite the impact of a global economic recession and the closure of nearly 300 high-end restaurants in the United States during the past two years, demand for high end, hormone- and antibiotic-free meat is still strong and the potential for expansion is significant.
Carmen Creek slaughtered 7,500 head of bison in 2009 and is hoping to increase slaughter numbers to about 8,500 in 2010.
European buyers comprise 43 percent of the company’s sales, followed by the United States at 40 percent and Canada at seven percent.
Mark Silzer, president of the Saskatchewan Bison Association and the Canadian Bison Association, said herd numbers have been falling during the past few years because producers who lived through tough times in the early part of the decade are eager to cash in on high slaughter prices.
“Certainly we haven’t seen any building in the herd because heifers have been gaining value and meat prices have been climbing.”
Regional droughts and feed shortages have contributed to reduced breeding herd numbers in parts of the West, he said.
Some established producers are also jumping at the opportunity to get out of the business now that prices are high and equity is growing.
That has opened the door for new producers and highlighted the need for an expansion in breeding numbers.
“We’ve been in this industry since 1994 and I truly believe that there’s never been a better time for people to get into this industry,” Silzer said.
“The economics look really good right now. Breeding stock prices are realistic, based on where the meat price is … and when you look at demand for a long time out, I think we’re looking at profitable, sustainable prices.”
Doug Griller, a long-time bison producer from Quill Lake, Sask., agreed, saying despite supply challenges, the industry is poised for growth and profitability.
“Since I got into the business, this is probably the most rational time I’ve seen,” he said. “In the 1990s, we had a lot of fun buying high-priced animals and selling high priced animals…. Today, the business is driven on the basic market fundamentals of supply and demand. It’s made businesspeople out of bison producers.”
