BEAVERLODGE, ALTA – The ongoing drought conditions have caused a hay shortage and increased hay prices, making it difficult for producers to afford to pay for their feed, and causing them to sell early.
Beaverlodge cattle producer Gary Ray said he recently sold 300 head of cattle at auction almost a month earlier than he usually would. He said he was happy they sold at an “alright price.”
“This month, we have done about 2,000 head through the auction, and then there’s the cattle we buy and move direct,” said Yancy Crosier, chief business development officer at Vold, Jones & Vold Auction Co. in Beaverlodge. “Usually we don’t really move any cattle until the end of August.”
The price of feeder cattle and calves remains strong, but because there are so many cows hitting the market across western Canada, cows have dropped in price 15 to 20 cents per pound. That’s about 20 per cent lower than previous years, said Crosier.
“It’s the longest, hottest, driest period I’ve ever seen,” said Ray.
“It’s just so dry up there; producers have got to move them as they have no option,” he said.
It’s not a situation limited to the South Peace.
“It’s devastating this year since it’s so widespread and the heat was so intense that it’s devastated and decimated crops and pastures just so quickly,” Melanie Wowk, chair of Alberta Beef Producers (ABP), told Town & Country News.
Selling cattle early in the season means producers sell at a lighter weight than usual, which also means less in the coffers.
“The biggest issue is there’s just no feed, and there’s not very much feed to be bought,” said Crosier.
Ray said many producers are facing extra costs in transportation, paying to truck in feed from other areas.
“The cost to keep a cow right now could be $700 over the winter,” said Crosier, noting that producers will need to feed cattle two months earlier than usual due to having no more pasture.
“We also are competing with Americans that are coming up into Canada and buying a lot of our feed,” said ABP’s Wowk.
“Americans received subsidies in early May that allowed them to come up here and purchase a lot of feed when it was a lot cheaper because obviously in May, things were looking a lot better.”
Ray believes the price for cows and calves will plummet as more producers realize they won’t be able to afford hay.
“I don’t think there is a best-case scenario,” said Ray, adding he plans to keep his herd going “to live and fight for another year.”
“Our hope is that we maintain as many cows as we can going through this, and then come next year and for a few years to come we try to rebuild,” said Wowk.
“We just feel this drought is so widespread and so devastating that we’re not going to come back after a year even if we get good snow and good runoff, and some rain in the spring, these pastures, especially the native pastures, just got beaten up, and it’s going to take a while to come back.”
Ray said he hopes to see some support for those additional costs.
On Friday, the province announced $136 million under the AgriRecovery program. Alberta is asking the federal government to provide an additional $204 million.
The province says that if they receive the federal funds, the program will provide an immediate payment of $94 per head to cover the costs of feed and water access to breeding females.
Alberta will be using a receipt-based approach to give a second payment of $106 per head that would be allocated later in the year.
“This will help level the playing field against a U.S. feed subsidy and maintain our livestock herds in Alberta,” said the province in a release.
“It’s tough on a good year. It’s tough when prices are good, and these crop prices just really threw our industry through a loop,” said Wowk.
She said she is concerned for the future of the industry as it struggles through this year.
“Our producer ages are starting to get up there, it is an ageing industry, and I think for a lot of producers, this will be the last straw for them. I think if they’re close to retirement, they’re not going to come back,” said Wowk.
She also has concerns for young producers who are just starting in the industry.
“You can’t make a living with 20 cows and a section of land anymore, it doesn’t pencil out,” said Wowk.
“It’s a very risky business.”
“These younger producers have quite high debt loads, and with the market being as unstable as it is and the grain prices being so high, they really don’t have any good business risk management options,” said Wowk.
“If you’ve got land payments and tractor payments and your cows are financed, you’re in big trouble,” concedes Crosier.
He said if a producer bought cows last spring for $2,200, they might only be worth $1,200 this year.
“I just hope that the producers can, number one, financially get through this, and number two, mentally get through this,” Crosier noted.
On July 22nd, the federal and provincial governments doubled the low yield threshold to encourage grain farmers to salvage crops for livestock feed.
The County of Grande Prairie declared an agricultural disaster on July 26th.
Crosier said that it will be a long nine to 10 months before cattle can go to pasture again, which will add to the stress of producers as they struggle to find feed and keep their herds going.
Ray is hopeful as he looks into the future as “no two years are the same.”