Andrew McClelland
The Advocate
Quebec lamb producers received a second compensation advance for the 2024 insurance year in late January as part of the Agricultural Income Stabilization Insurance Program (ASRA).
This advance amounts collectively to $3.3 million, which represents a net amount of $11.18 per lamb and $0.2577/kg of lamb sold. This payment is ASRA’s net amount paid to lamb producers for 2024 so far this year.
It’s a trying time for lamb producers in Canada — and Quebec in particular. Foreign imports, chiefly from New Zealand and Australia, make up 48 per cent of lamb in Quebec grocery stores. In order to stay competitive, Quebec lamb has to be negotiated at prices lower than the cost of production.
ASRA pays out to producers when the average selling price of a product is less than the adjusted stabilized income, which is based on the average cost of production of a given sector, such as lamb, slaughter cattle, with oats, wheat, barley, among others.
“Because even with (the current) high prices, we don’t cover our production costs,” said Jimmy Lapointe, president of Éleveurs d’ovins du Québec. “The proof is that ASRA was still triggered to the tune of $120 per lamb in 2023.”
Les Éleveurs d’ovins du Québec and La Financière were in extensive talks last fall regarding the cost of production calculation.
To calculate that cost of production, La Financière relies on data and analyses from the Centre d’études sur les coûts de production en agriculture (CECPA). A study released by CECPA last May caused concern among small-scale lamb producers who felt data from large-scale operations was tipping the balance out of their favour.
“We knew that the new study would have an impact, but it fell in our face last May. It triggered (ASRA), but very little compared to what we expected,” Lapointe told French-language weekly La Terre de chez nous.
While the present high prices for lambs address the cost-of-production imbalance somewhat, many producers are short of cash, facing liquidity problems that the advance payout from La Financière hopes to fix.
At the Éleveurs d’ovins du Québec’s annual meeting in November, members passed a resolution to set up a system for awarding heavy lamb sales contracts based on the same historical volumes of the past few years. Current Quebec production of heavy lambs exceeds market demand — and producers are concerned about a price drop.
“That’s good news in itself, because it means that our (sales system for heavy lamb) is working well,” said Lapointe, acknowledging that the sales system should be wary about oversupplying the market.
“Thanks to its ASRA program, La Financière agricole supports agricultural companies in the face of economic fluctuations and variations in production costs,” said La Financière agricole du Québec president Ernest Desrosiers.
“This second compensation advance for 2024 demonstrates the organization’s continued commitment to supporting and sustaining the agricultural sector.”
There are currently 709 sheep production companies registered in Quebec, making up a production volume of 4,000 tonnes. Monetary revenues for meat sales run to $51.2 million.