Expanded Biofuel Production Expected to Drive Up Food Prices

Canadian consumers can expect to pay more for pork and other red meats and poultry down the road as North American livestock producers adjust to increased competition for grains that have traditionally been used to feed livestock.

“The producers in the U.S. are very concerned.” Manitoba Pork Council Chairman Karl Kynoch explains, “Feed prices have gone up fast. Grain prices are where they need to be but what needs to happen now is for the meat price to follow. That’s a huge concern down here (the U.S. pork producing states). Where Iowa used to be a major exporter of corn, they could now become a major importer of corn.”
“What ever happens down here in the feedgrain price also happens in Canada and you can pretty much figure that what ever the American producer is paying for corn, we’ll be paying that in Canada plus freight,” Kynoch points out. He notes, our barley and wheat prices have followed corn prices upwards.

University of Alberta feed industry research chair Dr. Ruurd Zijlstra, also on hand in Banff, notes corn has seen the most drastic price increases and as a result of that we’ve seen a spike in barley and wheat prices as well.

“I’m not quite sure if the availability of the grains has shifted yet but certainly the prices of the grains have shifted based on a change in market supply and demand. I would suggest part of this increase in grain prices is simply due to speculation and part of it is due to a change in market demand, particularly from the ethanol industry,” Dr. Zijlstra explains.

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