The decision was made following extensive decision and strategic review by the board of ABP.

In a press release, Doug Roxburgh, chair of ABP, said national organizations like the CCA must deliver value to Alberta’s cattle producers.

He said ABP has high standards for fiscal transparency, governance and communications, and they expect the same from the organizations they are involved with.

“The CCA does not meet those standards,” said Roxburgh, who raises cattle near Bentley.

“After seeing no meaningful progress or willingness to change, we’ve made the decision to withdraw our membership,” he said.

Roxburgh said ABP has a duty to Albertan producers to make sure their dollars are invested in organizations that reflect and advance the beef industry’s values.

ABP will continue to be fully committed to representing Alberta’s cattle producers and ensure that their interests are advocated for at the provincial and federal levels.

Brad Dubeau, general manager of ABP, said the organization will continue to deliver strong representation for Alberta’s beef industry.

“In light of the board’s decision, we have mapped a strong path forward to ensure Alberta’s voice continues to be heard — provincially, nationally and internationally,” he said.

ABP will fulfill all its financial obligations to the CCA until the conclusion of the agreement on June 30, 2026.

ABP currently funds over 50 per cent of the CCA budget through the $2 Alberta service charge. ABP’s decision to withdraw from CCA will not affect funding to the Canadian Beef Check-off Agency, or its service providers, which include Canada Beef, Public and Stakeholder Engagement, and the Beef Cattle Research Council.

ABP’s goal is to prioritize the long-term strength and viability of its provincial operations, a decision that will continue to build a resilient, transparent and producer-driven organization that will meet the evolving nature of Alberta’s cattle industry.

The post Alberta Beef Producers announces withdrawal from Canadian Cattle Association appeared first on Alberta Farmer Express.

Ian Ryan, senior livestock economist with the Alberta government, says this report has a multi-year summary of the economic, productive and financial performance of Alberta cow-calf producers.

Participants received a customized business analysis of their operations for comparison to a benchmark report. Benchmarking allows comparisons based on production practices and marketing strategies and can help drive efficiency and financial performance.

The information is designed to provide information on what, when and how much of a commodity to sell.

The post Benchmarking cow-calf producers appeared first on Alberta Farmer Express.

And according to an Alberta market analyst, most of its forecasts check out.

The Canada: Livestock and Products Annual report predicts an ongoing contraction of the Canadian cow herd driven by a dwindling heifer herd created in part by producers sending them to feedlots in response to drought. High cattle prices may help, but there are challenges in that respect as well, said Anne Wasko.

“We know we’re going to have record strong cattle prices. That’s going to lead to some profitability that we haven’t seen in the industry for a long time. It’s a key peg to incentivize cow-calf producers to start retaining heifers,” said the market analyst with Gateway Livestock Marketing in Taber.

The question, said Wasko, is how producers are going to benefit from those prices with the prospect of ongoing drought and struggles to find feed. Some cattlemen are pinning their hopes on the possibility of an El Nino event that may bring some moisture.

“You’re still looking at high feed costs; there’s a lack of availability in many areas. And so again, it’s water and feed: if you can’t put those two pieces together you just can’t keep cows, you can’t grow your herd.” 

If there’s good news in any of this, said Wasko, it’s that the heifer population offers a bellwether for the health of the rest of the beef industry.

“We can watch the number of heifers getting placed (in feedlots), then we can watch the number of heifers our packers are processing as heifer slaughter, so we’ve got some pretty good data points to tell us what’s going on with heifers.”

The U.S. has an advantage over Canada thanks to this year’s rainfall, which saw moisture increase in all of the key cattle-producing states except for Texas. This suggests the States have a head start in building its cow herd before Canada.

“They had a 2021 drought as did we but their moisture conditions substantially improved in 2023 along with record cattle and calf prices,” said Wasko.  

“Most of the analysts that I work with in the U.S. are suggesting that some of the 2023 heifer calf crop will be retained.”

Even if Canada suddenly sees an increase in heifers that aren’t placed in feedlots, it will still be some time before it makes an impact on the national cow herd, she said. The U.S. will likely tell a different story in 2024-25. 

“The U.S. will start to retain heifers this winter and breed them next year, which will produce a calf in 2025. So they appear to be making that first start, but it’s because they had moisture along with the profitability.”

But that doesn’t mean U.S. producers are necessarily breaking out the hats and party favours. For one thing, Texas — which among the cattle-producing states suffered the most from drought — generally has the biggest beef cow herd of any state in the country. 

“It’s not like all of them are out of out of the woods in terms of drought,” said Wasko. 

Where the USDA report falls apart, said Wasko, is its forecast that Canadian beef production will be “stable” in 2024. As much as she wishes this could be true, the numbers do not bear it out.

“We’re down six per cent in total tonnage produced, mostly because we’re so down in steer and heifer numbers,” she said. “And I would argue that 2024 will be down at least a couple of per cent.” 

And it will take time to rebuild a herd that will produce profitably again.  

“When we do start to see some moisture and when cow-calf producers decide to start to retain some heifers, it actually shrinks the supply,” said Wasko.  

“You keep those heifers away from slaughter, harvest or production and it actually decreases it even further. So I would argue that we’ve got some declines in production ahead versus stable or static.”

And it looks like a significant amount of heifer replacement will be needed to build back to sustainable rates. 

“In (Canfax’s) heifer replacement data — and especially looking at June, July and August, the last month for which we have data — heifer replacements in the feedlots in western Canada — most of which are in southern Alberta — are up 54 per cent from last year,” said Wasko. 

“They’re making their way into feedlots pretty aggressively in the last three months.”

The USDA report predicts Canadian fed cattle numbers will be “propped up” by importing U.S. feeder cattle. Wasko agrees; stats show feeder cattle imports from the U.S. into Canada in 2023 are running 38 per cent more than 2022.

If production is down, it stands to reason exports will be down as well. Not surprisingly, this would create a bigger market in Canada for imports. Wasko said beef exports are down five per cent in 2023 so far, which is in line with the beef sector’s production deficit of six per cent. 

“As we go forward in the next few years, I would expect beef exports to be down and beef imports to be up. That’s how we keep the equivalency in the prices among trading nations.”

The post Bleak 2024 for Canadian beef sector, says U.S. report appeared first on Alberta Farmer Express.

The shutdown of Cargill in High River and the slowdown of JBS in Brooks left a backlog of cattle that many worried would pummel calf prices this fall.

“Our processing was limited in the spring,” said Brian Perillat, senior manager with CANFAX during the Canadian Cattlemen’s virtual town hall in late September.

“Through summer, we’ve recovered and processing levels are back to pre-COVID levels,” he said.

The plants have also been working through the backlog by adding Saturday shifts so they can slaughter six days a week.

At one point, the number of market-ready cattle that had to be held back at feedlots and farms hit around 130,000 cattle. But slaughter plants have since made impressive gains in reducing that number.

“Through the summer, we processed over 32,000 more than we did a year ago,” Perillat said during the Sept. 23 town hall. “We just got last week’s slaughter numbers. We processed about 7,500 more fed cattle (during the week) than we did last year.”

However, that still leaves a backlog of about 80,000 to 90,000 cattle left to work through.

“The cow market is hanging in there,” said Perillat. “It doesn’t have the premium it has compared to the U.S., so we’ll maybe see a few cows shuffle south.”

Carcass weights in Canada have gone up and are higher than a year ago.

“It’s something we’ve got to monitor as we still have some cattle to work through the rest of the third quarter and into the start of the fourth quarter,” he said.

Despite slaughter volumes increasing, Alberta fed cattle prices have struggled and have been well below year-ago levels all summer.

“That continues to be a weakness due to large cattle supplies on the market,” he said.

Despite the lower prices that feedlots are receiving for slaughter-ready cattle, feeder cattle prices have been strong through the summer, said Perillat.

The federal and provincial governments created a $43-million ‘set-aside’ program in Alberta to cover the costs of feeding cattle waiting to be processed. That program covered some of the losses during the spring, but feedlot losses have been significant.

However, the huge volatility in the fed cattle market has levelled off and calf prices are higher than they were a year ago and the futures markets have been projecting some stronger prices into new year.

“That’s something we’ve got to watch heading into the fall run,” said Perillat. “Just how long as these fed cattle prices going to be depressed and how much are they going to bid in, gamble and speculate on the market?”

The fall run has had a slow start. Sales of yearlings have ramped up, but sales of calves have been slower, he said.

Since there were no production shutdowns in Ontario, that market has not been significantly impacted, with Ontario prices at a slight premium compared to the Alberta market.

It is hoped that packers can continue working through the backlog quickly in this quarter. Spring placements were lower than a year ago.

“That should free up some space so we can work through this backlog,”said Perillat. “We can see some light at the end of the tunnel for the cattle on feed numbers, but we also have to remember, we placed a lot fewer this spring, and more cattle went on grass.

“We could see a lot more placements staying around, with a lot of feed around. Some cattle could background rather than going straight to finishing.”

There are a few other factors to watch.

The Canadian dollar, which fell below US70 cents in early spring, has been showing strength against the American greenback. As well barley prices are spiking back up and American corn prices are also rising. Both the dollar and the feed prices could affect calf prices.

And while the food service sector is suffering as the pandemic pummels restaurants, retail sales of beef are holding up quite well.

“Cut-outs are still hanging in there. Packing plants are making good profits and have a lot of incentive to kill more cattle,” said Perillat.

As well, feeder placements were lower in both the U.S. and Canada in spring, but more feeders were placed through the rest of the year in North America, he said.

“It’s not an imminent number, but we are going to have larger supplies in the fourth quarter,” he said.

The pandemic remains the wild card and the threat of packing plant shutdowns and supply chain issues has not gone away, Canadian Cattlemen’s Association president Bob Lowe said in his remarks to the town hall.

But everyone in the sector has to do their part, said Lowe, a rancher and feedlot operator from Nanton.

“As beef producers, we need to do our part to make sure we do not get more of an economic meltdown,” he said. “I would encourage everybody to remain vigilant about face masks and social distancing.

“The country can’t stand any more of an economic shutdown, so we need to do our part to make sure that doesn’t happen.”

The post ‘Light at the end of the tunnel’ as cattle backlog numbers fall appeared first on Alberta Farmer Express.

Between uncertain feed supplies, whiplash-inducing weather conditions, and variable cattle markets, producers across the province had to dig into their reserves, find a degree of patience, and call upon their hard-won experience to make a profit in 2019.

Here, three Alberta cattle producers share the ups and downs they faced this year.

Fred Lozeman, Claresholm

“For this area of the province, it was definitely an improvement over 2018,” said Lozeman.

“The first part of the year seemed to be relatively dry. The second part of the year turned out to be relatively wet. But the grass did grow. Our hay crops were probably a little below average, but definitely better than 2018.”

It was also a little easier to secure feedstuff this year — another improvement over last year, he added.

“That was a nice, welcome relief for a lot of people. We had adequate feeds we could grow or, if we had to, to purchase.”

But prices weren’t what he’d hoped for. Calf prices, while down a bit, were “satisfactory” but “it was definitely a challenge to make some money on finished cattle for a lot of 2019.”

“We dealt with very high feed prices in the early part of 2019, so I think that really affected the ability to make some profit on a lot of the cattle that we had on hand,” said Lozeman, who has a mixed operation.

“All of the things that go into making up those prices — including concern about trade disruptions not only in cattle but in hogs and canola — factored in to 2019 in terms of profitability.”

These ups and downs are just par for the course on Lozeman’s operation, though.

“I’ve been at this for 27 years since I came back to farming, and every year is a little bit different.”

But he has high hopes for next year. Cattle markets are looking stronger, and the moisture situation heading into winter should get next year’s season off to a good start.

“That’s always very gratifying to watch — when spring hits and the grass is growing great and the hay crops are looking good,” he said. “It’s not as stressful, so we’re looking forward to that.”

Duane Movald, Breton

“Cold, dreary, and wet” is Movald’s description of 2019.

“It was an overcast year. It was cool. The sunlight didn’t get through. It seemed like it was high humidity from February to where we sit today. The growing season never seems long enough, but this one was a really short growing season.”

Even so, Movald managed “decent grass production” this year, though his cereals didn’t reach maturity before the snow fell.

“We haven’t combined yet, let’s put it that way.”

So while there’s an abundance of feed, it’s not necessarily good quality, he added.

“If you’re looking for really premium-quality hay, it just isn’t out there. Not in any amounts.”

The cattle markets have been equally so-so.

“I was looking at some slips from year over year on steer calves that we marketed fairly close to the same time of year. They were somewhat heavier this year, and we grossed a few extra dollars. So that part was OK,” he said.

“But in the bred market this fall, some of the earlier bred sales seemed like they were under a bit of pressure. As we’ve got further into December now, it seems like they’ve strengthened up a bit.”

Movald is hopeful it will stay that way for a while.

“If the supplies start to tighten up, it should put beef producers in a good position to capitalize on things here. It’s just a matter of when,” he said.

He’s also excited to see what the new year brings for his cattle herd — particularly the new genetics he’ll be trying in his purebred Simmentals.

“At the beginning of a new year, you’re always anxious to see how your cumulative work is going to pan out. That’s always an exciting thing — to see where we’re at compared to other years,” he said.

“There are so many things we can’t deal with, but that’s one thing we have 100 per cent control over — what type of product we’re going to be producing.

“It keeps driving you forward when you can keep hitting these goals you have every year. In a new year, there’s always some optimism.”

Kelly Smith-Fraser, Pine Falls

Tight feed supplies was the worry a year ago.

“With the feed supply last winter, I was pretty much recalculating our bale count every week to make sure there was enough feed for the cows to get through the winter and make sure they were in good enough condition to breed back early,” said Smith-Fraser.

“But we got the cows through winter on a pretty tight supply by utilizing different feeding methods than what we’ve done before.”

Normally, Smith-Fraser’s cows are “fairly spoiled — they definitely get the best of the best feed that we can.” But this year, they had to stretch their feed supplies with straw, something they haven’t had to do in close to 20 years.

“I did not want to have to ship cows because of a feed situation, but I learned that I can still stretch the feed out a little while keeping the cows in the condition that I want,” she said.

A dry spring added to her worries, but that switched up in a hurry.

“When it started raining, it sure rained,” she said, adding it not only delayed haying but reduced protein levels. “They weren’t as good maybe as some of our best years, but they were still decent hay crops.”

A shop fire in the spring only added to the stress.

“We had a pretty devastating fire on our farm. We lost our shop and our chore tractor and bale shredder. So personally, we had kind of a devastating spring that just added some extra challenges.”

But 2019 wasn’t all bad for Smith-Fraser.

“I got a new shop,” she said with a laugh.

Calf markets provided another silver lining.

“The calf market was really good and strong this fall,” she said, adding cull prices were down a little. “The calf prices this fall were definitely a bright spot for us. It sure made last year a lot easier knowing that we put some expensive feed into those calves.

“All in all, it was a pretty darn decent year that started out pretty stressful.”

As for next year, Smith-Fraser is most looking forward to changes in Alberta’s beef industry. As the new chair for Alberta Beef Producers, she will be working closely with the organization’s board and staff to restructure the organization and make it more effective for Alberta’s beef producers.

“It’s such an awesome time to be involved in the industry,” she said.

A little closer to home, Smith-Fraser is excited about working with her eight-year-old daughter and other youth in the industry who are starting to show steers and prospect heifers.

“I continue every year to be excited about these youth who are coming into the industry,” she said.

“There’s a pile of interest, and it’s great to see the interest that those kids have and their desire to be involved in the industry. It’s just awesome the opportunities these kids get to have. That just makes my heart sing.”

The post A year with more ups than downs, say these cattle producers appeared first on Alberta Farmer Express.

The notion that ‘beef is bad’ has infiltrated popular opinions of the commodity, making it difficult for alternate perspectives to break through the fog of negative rhetoric.

So here I clearly state: Beef is not all bad; beef may be part of the solution.

The emissions generated in Canadian beef production are among the lowest in the world. While it is true that Canadian agriculture emissions as a whole have increased, the beef industry has achieved emissions reductions. For each kilogram of live weight, Canadian beef produces just 11.4 kilograms of carbon dioxide — less than half of the international average.

As well, from 1981 to 2011, the production of one unit of beef saw a 17 per cent decrease in water usage and a 15 per cent reduction in greenhouse gas emissions. This progress will likely continue, as the future adoption of mitigation strategies is estimated to produce a 20 per cent decrease in emissions, with an additional five per cent eliminated, should we half food waste.

The land that is reserved for Canadian cattle grazing contributes greatly to the mitigation of climate change, trapping 1.5 billion tonnes of carbon in its soil in a storage process that is long term and durable. The amount of carbon contained beneath the surface of one hec­tare of uncultivated fescue prairie equates to the removal of around 150 cars for an entire year.

In addition, pasture land is intimately connected to the preservation and conservation of grasslands and wetlands ecosystems. These biomes, protected by pasture land reserves, support endangered species while livestock provide important processes of nutrient recycling.

The key role that cattle play in protecting these ecosystems has led Ducks Unlimited Canada to launch its Revolving Land Conservation Program. This initiative takes wetlands and grasslands restored by the organization and sells them to producers with conservation easements in place.

Such collaborations allow for the protection of threatened ecosystems on a scale that could not be achieved by either conservationists or ranchers alone, and illustrate the potential benefits of the beef industry’s inclusion in the pursuit of climate solutions.

Agriculture extends back in my family for five generations, so I have witnessed first hand the degree of stewardship that producers demonstrate.

Ranchers have an unparalleled connection with the environment, as their livelihoods depend on it. It is therefore in the interest of beef producers to ensure that the methods they employ are sustainable. Ranchers have cultivated conservational agricultural practices over time, coupling practical methods (such as grazing management techniques) with scientific research to achieve industry improvements and emissions reductions.

Therefore, we need to stop targeting beef producers as the instigators of the climate crisis and recognize the potential benefits that these stewards provide.

Despite these facts, critics continue to push the narrative that ‘beef is bad.’

However, I invite them to consider a world without beef.

A world where the 50 million acres of pasture land — a great portion of which is not suitable for crops — would conceivably be converted for industrial purposes, and its stored carbon released into our atmosphere. A world that experiences the subsequent collapse of wetlands and grasslands ecosystems as a consequence of pasture land’s industrial conversion.

Without beef, these biomes will encounter the removal of the nutrient recycling process and the habitat protection provided by grazing cattle. Imagine a world where an entire industry of environmentally passionate and driven people have their livelihoods ripped away — where a multigenerational and centuries-long way of life is eradicated.

Is this the world we are striving for?

Instead, I encourage critics to envision a world where beef producers become woven into the positive story; a world where ranchers continue to work hand in hand with climate scientists and conservationists to harness the beef sector’s capacity to mitigate climate change; where lush grasslands and wetlands filled with beef herds carpet the Earth, sustaining human populations and threatened species alike.

I invite them to imagine a world where carbon sequestration processes, industry improvements and best practices are employed by producers to reduce greenhouse gas emissions in the creation of a more sustainable world.

It is imperative that we stop pointing the finger at the beef sector and honour its capacity to generate positive impacts, for we are vilifying the very thing that could help save us.

Society must navigate its way through the negative campaigns and accept the truth. After all, when we get to the meat of the issue and the facts are presented, there should be no beef about it.

The post Comment: A world without Canadian beef would not be good for the planet appeared first on Alberta Farmer Express.

“There are a number of reasons for culling, and they all relate to profitability,” said provincial business management specialist Ted Nibourg.

“If the herd isn’t profitable, if the cows aren’t making you money, it might be time to send them to town.”

Over the past year and a half, feed costs have largely been driving the decision to cull on Alberta farms, Nibourg said in a webinar earlier this month.

“Eight cents a pound for hay is about the breakeven for profitability for a cow herd in this province, and we certainly saw hay prices higher than that last year,” he said. “It’s definitely affected the bottom line of a lot of producers.”

And that’s been reflected in the diminishing size of Alberta’s cow herd over the past year. Between January 2018 and January 2019, cow numbers dropped 1.4 per cent, while replacement heifer numbers dropped by 2.3 per cent. That decline is even more pronounced in the recent release of July 1 numbers, with cow numbers down 2.8 per cent from the previous July and replacement heifer numbers down by nearly seven per cent.

“That tells me that we’re not in the expansion phase — we’re in the contraction phase,” Nibourg said. “That’s going to have some bearing on feed costs. If the demand is down and supply is static, price will usually go down with it.”

Feed expenses often account for two-thirds of production costs, and so culling is a way to drop those costs even further and stretch out the feed supply, said provincial livestock extension specialist Andrea Hanson.

But it needs to be done strategically.

“If you’ve decided you need to reduce your herd size this fall to match your feed supply, developing a culling strategy would be wise,” said Hanson, who also spoke in the webinar.

Open cows

Culling the open cows — “those freeloaders” — is a given.

“In a commercial cattle operation, the pounds of calf weaned to the cows exposed to the bull are the benchmark,” she said. “Any cow that is not pulling her weight by raising a calf needs to be culled so she isn’t eating up the profits of that operation.”

So the first step is pregnancy-checking the herd, and depending on when the bull was turned out with the cows, “you may be able to check as soon as now.”

“Vets who use ultrasounds can usually detect a pregnancy earlier than doing manual palpitations, which should be able to be done as soon as 40 days,” said Hanson, adding the minimum number of days depends on the veterinarian’s experience and comfort level.

“Knowing sooner than later gives you the most flexibility when it comes to market decisions.”

Preg-checking and then selling soon after means that the cows aren’t eating any additional feed, but you might be selling into low fall prices.

“Culling cows is impacted by price seasonality, just like any other marketing decision,” Nibourg said. “D1 and D2 prices typically drop from about the first part of September to mid-November. That drop averages about 15 per cent.

“On the plus side, prices tend to increase from mid-November to about the end of March, and that increase averages about 27 per cent.”

Producers who can avoid selling into that low fall market could also add additional weight to the open cows they plan to sell in the spring.

“Open cows don’t require the same level of nutrition as their pregnant counterparts, so often, you can utilize cheaper alternative feeds to add that weight,” Hanson said. “This could be an important step if the cows are thinner and you want to put some extra weight on them.”

In that case, open cows should also be separated from the rest of the herd and fed differently, she added.

G.O.L.D. management indicators

But the economics of deciding when to cull and which cows to send comes down to each operation and, ultimately, each cow. Age is a consideration, as is length of calving and the growth of the calves.

“For any commercial cattle producer, profitability of the operation depends on the ‘G.O.L.D.’ management indicators,” Hanson said.

In this common benchmarking system, G is for growth (measured as a percentage of pounds weaned per mature cow weight), O is for the open rate of cows. L is for the length of the calving season, and D is for the death loss of calves.

The benchmark target for growth is 43 per cent or better, the open cow rate should be less than seven per cent, the length of calving should be 63 days or less, and the death loss should be less than seven per cent.

Beyond that, Hanson prioritizes her culling order by looking at things such as disposition, health issues, conformation, performance, vigour and age.

“If further culling is needed, there are a number of criteria to choose from, and developing a prioritized list will ensure a strategic process is followed,” she said.

But there’s no one-size-fits-all approach to determining the order, she added.

“This is the way I would prioritize culling standards, but someone else might have a completely different list in a different order or with different criteria,” she said.

“There’s no right or wrong. It just depends on your objectives.”

The post With feed expensive and supplies tight, more cows are ‘heading to town appeared first on Alberta Farmer Express.

“Calf prices are generally higher than a year ago. We’re seeing our calf and feeder prices 15 to 20 cents higher than a year ago, which is pretty positive,” said Brian Perillat, manager and senior analyst with Canfax.

The sector is being affected by China, but in a positive way — as African swine fever has decimated its hog herd, the country is looking for sources of protein, which could include beef.

“China has half the pigs in the world and they are dying like crazy. That’s going to create some demand for meat,” said Perillat. “How much will be beef is still the question.”

China may not directly buy Canadian beef — both because of politics and that ractopamine is used in some cattle during finishing. But by ramping up purchases from countries such as Australia, New Zealand and Uruguay, beef that used to come to Canada is now being diverted to China.

“It’s indirectly impacting us that way,” said Perillat. “Time will tell how hungry they get for meat.”

Meanwhile, reduced tariffs under the Trans-Pacific trade deal have seen exports to Japan double since the start of the year. Canadian tariffs into Japan have fallen from 38.5 per cent to 26.5 per cent.

“They dropped a little bit more in April and they’re continuing to decline,” he said. “We’ve got a pretty big advantage to the U.S. going into Japan right now.”

The futures market has generated some pretty strong prices, and that’s currently supporting the current calf and feeder market. Fed calf prices have been kind of flat.

“We’ve been around $1.60 for a fixed year price, and maybe a little higher than a year ago,” he said.

Feedlots have not been marketing a lot of money, and may even be losing a little.

“We expected the first-quarter prices in Western Canada to be quite strong, and really, they’ve been a bit disappointing,” said Perillat, noting fed cattle had been selling at a premium against American but the traditional discount has now returned.

But overall, cattle prices are above where they were a year ago.

“They’re still historically fairly strong and exports look good. One of the challenges we have is that basis level.”

Even though exports have increased and beef demand has also increased, fed cattle prices haven’t performed quite as well. Overall, North America has added 2.8 million cattle and no slaughter capacity.

“The beef markets have been good, but cattle markets have been mediocre,” said Perillat. “Same as culled cows. We’ve been butchering a lot of cows and prices there are below a couple of years ago.”

The herd shrunk last year because of the dryness in southern Alberta and Saskatchewan, contracting by about one per cent. Heifer retention was down because pastures were dry, feed was tight, and forage more expensive.

“We did see more cows go to town and unfortunately, our cow herd has been shrinking. We’re at the smallest beef cow herd since 1991.”

That small herd could present some problems, such as producing the volumes that packers need to operate efficiently. But that’s not the case right now.

“We’re finishing more cattle here, we’re processing more cattle here than we have in recent years,” said Perillat. “Last year, our slaughter was the biggest since 2010. We’ve exported less cattle and we imported cattle to feed in Canada. All in all, the industry is functioning well and being quite competitive.”

Perillat is hoping there will be relief in the feed prices as more barley gets planted in the place of canola.

“The Canadian dollar is a wild card. If it stays around this 75-cent range, that’s generally positive for the cattle industry,” he said. “If the dollar goes up to 80 cents or above, that does take quite a bite out of our prices.”

The post Stability of Steady Eddie cattle market is the envy of other sectors appeared first on Alberta Farmer Express.

“The July 1 inventory showed that we were completely steady with beef cow numbers,” said Brenna Grant, manager of Canfax Research Services.

“We did have an increase in beef heifers for breeding purposes — so retention numbers — but we’re still well below the long-term average.

“There’s no indication that producers are gung-ho to expand.”

Canada’s cattle herd is currently sitting around 13,205,000 animals, up slightly from 2015’s count of 13,035,000. For many producers, last year’s drought conditions during breeding season put a halt to any expansion plans, said Grant.

“Some of them who were planning on rebuilding their herds figured they weren’t going to have feed that winter.”

Around the same time, cattle prices peaked and have since been declining steadily.

“We’re now down 30 per cent from the peak in May of 2015, which is a dramatic drop over 18 months,” she said. “We’re still falling, and we’re seeing that the U.S. market continues to fall as well. That’s obviously had an impact on the price signals to cow-calf producers, as calf prices have gone from a high of about $325 down to about $200 per hundredweight.

“Producers are looking at profitability for the signal to expand being back in line with what we saw in 2012.”

Cow-calf producers are still profitable today — but not nearly as profitable as they were a year or two ago, she added.

“Producers are very aware that prices are declining. The question that everyone is asking right now is, ‘How low can prices go, and when are we going to get there?’”

In previous cycles, it typically took almost two years for prices to bottom out.

“We’re looking at probably mid-2017 or early 2018 before prices bottom out,” said Grant. “For many producers, they need prices to bottom tomorrow.”

Riding the downturn

Falling prices may drive some producers out of the industry altogether — particularly older ones nearing the end of their farming careers.

“Our demographics are older producers who are looking at slowing down and getting semi-retired,” said Grant. “They’re going in a different direction than a young producer who really sees a future for the beef industry in Canada and sees the potential and opportunities of trade agreements that are coming in.

“Given the demographics of our industry, we definitely need young people who see the opportunities not just in the coming cattle cycle but in future cattle cycles as well.”

And young producers need to start building their herds with those future cycles in mind.

“If they’re going to get in, they have to say, ‘OK, I’m going to expand my herd, but it’s going to be a slow and steady expansion over the next 10 years, because the next time the peak comes, I’m going to be ready.’”

But in order to ride the downturn, young producers need a solid business plan.

“It’s not impossible,” said Grant. “Sometimes we can talk in the industry like it’s impossible, but there are definitely success stories out there from young producers who have done it.”

The key is knowing per-unit costs.

“Know what it costs you and know what your profitability and your margins are in your operation. A low-cost producer is definitely still seeing profits and still seeing a good signal to expand even now. As prices decline, they need to know the point when they’re not going to be profitable anymore.”

Aggressive expansion

That’s what Clay and Jesse Williams have done on their cow-calf operation near Hanna.

“Prices are lower than they were in 2014, but I think if you manage your operation right and keep your costs of production down, it’s not unprofitable — it’s just less profitable,” said Clay Williams.

The Williams started operating Whiskey Creek Ranch in 2012, right at the start of the upturn, and have since grown their operation “pretty aggressively” by about 40 head a year.

“This year, the prices have come down pretty hard, but in the years leading up to this, the market has been pretty strong and working in our favour, and that allowed us to keep back enough animals to grow our cow-calf herd,” said Clay.

A lot of that was luck, he admitted, but the couple also “analyzes things quite intensively.”

“We made some smart decisions, and we made some lucky decisions,” he said.

For instance, the Williams didn’t expect yearlings to do well this year and decided not to buy any.

“That educated guess turned out to be a profitable one,” Clay said.

The couple also keeps detailed records of their per-unit cost of production so they can take advantage of any potential savings that come up.

“We try to analyze everything,” said Jesse. “You can’t manage what you don’t measure. We have pretty extensive — probably obnoxious — records so that we can make those decisions on where we can cut and where we can’t.”

For some things — like bulls — the Williams “do spend more money than other people,” but only if they know that investment will pay off.

“We know exactly where we’re spending our money, rather than just assuming cost of production, which I find a lot of ranchers do,” said Clay. “We know exactly how many dollars are put into each cow in order to get a certain dollar. We’ll do the math on it to prove it. If we can’t prove it on paper, we’re not going to do it.”

That helps the couple make herd decisions as well, added Jesse.

“If we have a cow that’s constantly needing treatment or that’s constantly costing us money in one way or another, we can get rid of the more expensive cows and know which ones make us more money.”

By keeping their costs low and tracking their exact cost of production, the couple has started to work toward a “pretty aggressive” five-year plan. Over the next two years, the Williams will be building their yard, corrals, and pens so they can start backgrounding 150 replacement heifers every winter.

“We’re planning on using that to grow our cow-calf production ultimately to 500 head of cow-calf,” said Clay. “We’ll pretty much be growing as fast as we can find grass for it.”

And in some ways, the downturn will help with that, he added.

“As a starting-out cow-calf producer, this downturn will be tough, but it’s also an opportunity for us growing our herd, as there will be some cheaper, good-quality animals that a person can get a hold of that can build your herd,” he said.

“We’ve made the decision that we wanted to grow our herd for the long term,” added Jesse. “We’re in it for the long term, not the short haul.”

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The study, led by research scientist Tim McAllister of Agriculture and Agri-Food Canada in Lethbridge, with staff from AAFC, Environment Canada and the University of Manitoba, logs a “significant reduction in GHG intensity” when comparing 2011 figures with those from 1981.

The first results from the five-year (2013-18) study, published Dec. 23 in the journal Animal Production Science, credit “continual improvements in production and feed efficiencies, crop yields and management strategies.”

GHG emissions have long been a contentious issue for the livestock sector. According to the Canadian Roundtable for Sustainable Beef (CRSB) in a release Monday, Canada’s beef industry today accounts for 3.6 per cent of Canada’s greenhouse gas production and 0.072 per cent of global greenhouse gas production.

At the same time, lands that grow grasses and legumes for cattle sequester carbon, thereby reducing GHGs, the group said.

GHG emissions in the study were estimated using life-cycle assessments (cradle to farm gate) based mainly on Holos, a Canadian whole-farm emissions model, the researchers wrote in their paper.

Compared with 1981, in 2011 the same amount of slaughter weight was produced, with a 14 per cent decline in methane emissions, 15 per cent decline in nitrous dioxide emissions and a 12 per cent decline in carbon dioxide emissions from fossil fuel use.

Enteric methane production — that is, from the animals’ digestive systems — accounted for 73 per cent of total GHG emissions in both years.

In all, the study found, the estimated intensity of GHG emissions per kilogram of live weight that left the farm was 14 kilograms of carbon dioxide equivalents for 1981, but 12 kg of carbon dioxide equivalents for 2011, down 14 per cent.

Past that, the study found that in 2011, beef production in Canada required only 71 per cent of the breeding herd (such as cows, bulls, calves and replacement heifers) and 76 per cent of the land needed to produce the same amount of live weight for slaughter as in 1981.

“We’re working to get a more accurate assessment of the Canadian beef industry’s environmental footprint and these results indicate that the footprint per kilogram of beef produced is getting smaller,” McAllister said in Monday’s release from the CRSB and Beef Cattle Research Council (BCRC).

The needed production and feed efficiencies, crop yields and improved management practices “wouldn’t have happened if it weren’t for investments in research and development, and the industry’s ability to adopt those technologies,” he said.

Those investments led to increased average daily gain and slaughter weight, improved reproductive efficiency, reduced time to slaughter, increased crop yields and a shift towards high-grain diets that enabled cattle to be marketed at an earlier age, the researchers said in their paper.

However, in terms of the industry’s overall sustainability, they wrote, “future studies are necessary to examine the impact of beef production on other sustainability metrics, including water use, air quality, biodiversity and provision of ecosystems services.”

“Perceived” concerns about the beef sector’s environmental impacts “often overshadow the beneficial impacts of the beef industry,” BCRC chair Tim Oleksyn, a cow-calf producer from Shellbrook in northern Saskatchewan, said in Monday’s release.

Beef producers, he said, are “inherently motivated to be more efficient, which most often has social, economic and environmental benefits. Now that we have resource use and GHG emission benchmarks, we can move forward as an industry and more strategically target our efforts to improve.”

The CRSB’s sustainability assessment is expected to benchmark the industry’s social, economic and environmental impact, using 2013 as the baseline, and to be revisited and evaluated every five years.

Results from the remaining phases of the industry environmental footprint study are expected in 2018, the CRSB said. — AGCanada.com Network

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