Will a third of a billion dollars in drought aid be enough?

Massive emergency rescue plan won’t be enough for many

“The cost of feeding a cow this winter is going to be astronomical” and for many, even a $200-per-cow payment won’t be enough to cover the extra costs, says Rob Somerville, who ranches with his family near Endiang.
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Emergency money for cattle producers is coming, but now the big questions are: How fast will it arrive? And will it be enough?

Although the $340 million pledged for Alberta ranchers under the AgriRecovery program is a big number, the skyrocketing cost of feeding cattle is even bigger.

“The total lend is $200 a head. I’m sure that for some producers that is not enough,” said Rob Somerville, who ranches at Endiang in central Alberta.

“Two hundred dollars would certainly leave some producers forced to sell cows.”

Jason Hale, vice-chair of Alberta Beef Producers, agrees.

“Producers are going to have to be inventive with feeding their cows,” said the Bassano-area rancher. “If you’re relying only on that $200, you’re going to have to cover some of the added costs yourself.”

But it should help many save their mother cows and preserve the valuable genetics that producers have spent years refining in their herds.

“Some producers will sell off some of their cows,” said Hale. “With this, we’re just hoping that not as many.”

The provincial government has said there will be “an immediate payment” of $94 per head (to be dispersed by the Agricultural Financial Services Corporation) to help cover feed and water access costs for breeding females.

But some producers have already run out of pasture or will soon have to start using their limited supply of stored feed months ahead of normal. And with feed costs at sky-high levels — feed barley above $9 a bushel, silage at about $100 a tonne in some areas and hay in some areas reportedly going anywhere from $200 to $400 a tonne— it won’t take long for that money to be spent.

One of Hale’s neighbours has already depleted his pastures and is feeding his cows.

“There’s a lot of producers who, well, if they aren’t feeding now, they will be feeding very shortly,” he said.

The hurt varies widely but many producers are in dire straits, said Fred Lozeman, a cow-calf producer and small feedlot owner who ranches near Claresholm.

“In parts of the south, it is pretty traumatic. The farther east you go, the more desperate it becomes,” he said. “Even around here, we’ve got neighbours who are stopping by and asking if we can winter some cattle. We’re just trying to evaluate for ourselves whether we have enough for our own, so we haven’t been able to give any answers out.

“It’s so uncertain right now. It’s a difficult situation, that’s for sure.”

And while a per-head payment is likely the only logical way to divvy up the government cash, some are in greater need than others — and the availability of feed also varies widely, he said.

“Some buy all their feed and they have cash set aside to do that, but not enough cash and they’re having a hard time finding where that feed is,” said Lozeman. “Some who raise their own feed are in a shortfall and don’t have the cash flow to go buy a whole bunch. For them, the sooner they can get that money in their hands, the better it will be. At least, it will start that process.”

But if it’s not enough, producers face a series of hard choices, said Somerville.

“At some point, there’s an economic reality to this problem that may be beyond AgriRecovery’s ability to make a difference,” he said. “The cost of feeding a cow this winter is going to be astronomical — beyond what anybody would have anticipated.”

Some farmers will have to make the hard decision to let some of their cows go, he said.

“A lot of people are anticipating the price of culled cows will drop and then selling cows doesn’t bring you a lot of money either,” he said. “It’s an ugly, ugly situation.”

And it’s made worse by the fact that it’s not just parts of the province that are affected by drought, but virtually the entire Prairies.

“Everything basically from northwestern Ontario to Tofino (on the western coast of Vancouver Island) is in drought,” said Trevor Hadwen, an agro-climate specialist with Agriculture and Agri-Food Canada in Regina. “That makes it much more difficult to manage the effects of the drought.”

The situation is so bad it’s being compared to some of the worst-ever droughts — years like 1936, 1961 and 1988. Those are fair but imperfect, comparisons, said Hadwen, noting the 1988 drought wasn’t as widespread.

Hadwen personally remembers hay shipments coming in from as far afield as Texas during other very dry years.

“It’s not unprecedented, but it’s certainly not normal,” he said. “It’s very costly and the work to get it here is immense.”

Somerville isn’t thinking he’ll need to go as far as Texas but he is wondering where he will find feed if he needs to buy it.

“In other droughts, we have bought feed from as far away as Barrhead (more than 350 kilometres away),” he said. “Now that we’ve done that, it doesn’t seem as extreme as it did, to go there for feed. I’m sure this year we could be looking farther than that.”

Cash flow is another issue.

His family operation bought crop insurance, but it’s not expected to come in until December or January.

“There’s a huge gap between when we see that income and when we have to start bringing in feed,” said Somerville. “We can’t wait until January until we start buying feed because it could easily be all gone. If you have to buy enough feed to last until May, you could be buying in October or November, even earlier.”

So the money from AgriRecovery and crop insurance better come quickly, he said.

“If the goal is to stem off a huge sell-off of cows, I see cash flow as a solution to that problem,” he said.

Hale said prices for yearlings have held steady so far, and some calf sales have looked pretty good, too.

“There will be a decline in the herd,” he said. “At this point, it’s hard to predict how big of a drop. That’s one reason why we’ve been pushing AgriRecovery as hard as we can.”

The process of finding feed can be challenging, too.

Angie O’Connor only has a dozen cows and doesn’t plan to reduce that number unless she absolutely has to.

“I’m not in as bad of a situation as some, but getting feed is hard,” said O’Connor who lives on an acreage near Wimborne, northeast of Olds.

Since she doesn’t have enough land to grow enough hay or room to store much, she’s used to the challenge of securing winter feed. Normally prices start going down in late summer, but not this year. Instead, there’s a lot of folks wanting top dollar for mediocre hay on Kijiji and some demanding big deposits before you’ve even seen if the hay, in fact, exists.

“This year, everyone and their dog has gone and baled their slough and now they want 10 cents a pound for it,” she said. “I know everybody is having the same issue.”

Hale said some producers will have to make the hard decision to lose a part of the breeding herd.

“Speaking personally, we’ve spent years building up the genetics in our herd and getting the right bulls combining with our cows,” he said. “It takes years and years to get to where you want to be. It will be emotionally and mentally hard for producers to decide who to get rid of, and how to build the herd back.”

And some may decide to pack it in, he added.

“We’re just trying to help as many as we can stay in business,” he said.

– With Glacier FarmMedia files


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About the author

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Alexis Kienlen

Alexis Kienlen lives in Edmonton and has been writing for Alberta Farmer since 2008. Originally from Saskatoon, Alexis is also the author of two collections of poetry, a biography, and a novel called "Mad Cow."

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