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Cattle industry holding up despite high feed costs

Advantage Unlike pork producers who rely on grain, cattle producers have other options

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Cattle producers are coping with high feed costs that are hammering Canadian hog farmers and recently forced two of the largest Prairie hog producers to file for bankruptcy.

Profit margins are being squeezed somewhat by lower prices, but the situation is nowhere near as severe, said Cam Dahl, operations manager of Manitoba Beef Producers.

“It’s hard to say why different industries react differently,” Dahl said. “But I don’t see the same kind of volatility coming in the beef industry as in the pork industry.”

More lower-cost feed options is part of the answer, said Martin Unrau, president of the Canadian Cattlemen’s Association.

“Cattle producers can feed straw and blend in a bit of dry distillers grain and a bit of barley, and sometimes they have access to lesser-quality hay that’s ground and mixed in with other feeds,” Unrau noted.

Hog producers, on the other hand, “live or die” with feed grain prices, he said.

Some smaller producers may be forced to liquidate their herds because of high feed costs but the problem — for now — is very isolated, Unrau said.

“The cattle industry’s cycle is a little longer so it takes a little longer to feel the pain and re-establish itself when it does run into difficulties,” said Unrau, who ranches near MacGregor, Man..

However, water access is becoming a concern in some areas, said Unrau, who has had to find alternate water sources and deepen three of his dugouts that were drying up.

“I know cattle producers will face difficulties this winter with water situations,” he said. “It’s not an emergency situation, but if we don’t get any snow or rain before winter then it will be.”

Some cattle producers in Canada could also find themselves running short of hay, as so much is heading south because of the U.S. drought, Unrau said.

“I think anybody who is a bit short of hay needs to get on it now before all the supplies are gone,” he said.

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