PUBLISHED BY MANITOBA BEEF PRODUCERS
NOVEMBER 2021
In advance of the Thanksgiving weekend green feed bales were being taken off a field near Deerwood so that the cattle could be turned onto the pasture. (Photo credit: Jeannette Greaves)
Beef business booms while cattle producers squeezed
Manitoba cattle producers are looking back on a tough year while they tally up their losses as the annual fall run kicks in. A lack of snowmelt and parched soils in spring put pressure on pastures and grasslands already dry from the previous fall. A crippling summer drought with record high temperatures and little rain resulted in serious feed shortfalls. High feed grain prices stemming from drought-induced low crop yields added to the difficulty in sourcing feed for animals. Auction markets held emergency summer sales as many producers were forced to downsize or liquidate herds. Some sold off their herds completely. Others scoured the countryside for alternative feeds, stockpiled them for winter and hoped they had enough to get their cattle through the coming months.
The effect of the 2021 drought could have long-term future consequences, industry analysts warn. “The base line for our cow herd in Canada is really going to be impacted by the lack of feed and the cost of feed. That’s hugely concerning,” said Anne Wasko, market analyst for Gateway Livestock Marketing. “What cow-calf producers are going to need is some significant moisture to even start to replenish what’s happened so far.” But while cow-calf producers wonder how long or even if they can hang on, other sectors in the beef industry are doing surprisingly well. Packing plants are running at or near full capacity. Cattle prices in early fall were strong, despite high feed costs. Beef export sales in July were booming, with increases of 13 per cent in volume and 44 per cent in value over July 2020. Here
at home, domestic demand for beef is up over last year, despite high prices at the retail meat counter. “I would say that the marketplace is strong and will continue to be promising going forward,” said Ron Glaser, vicepresident of corporate affairs for Canada Beef. “Overall, it’s been a good marketplace for beef and we think the future is bright.” That’s not to say the industry is immune from the effects of drought and COVID-19. An outbreak of the disease at the Cargill plant in High River, Alberta last year shut down the facility for several weeks and led to a backlog of over 100,000 slaughter cattle. But the logjam has now been largely cleared and plants are running at 90-95 per cent slaughter capacity with an average weekly kill of over 70,000 head - a lot for the time of year, said Brian Perillat, manager and senior analyst for Canfax.
“For the time being, our packing sector looks pretty healthy,” Perillat said. “For the most part, demand has been incredibly strong.” There had been concerns that herd liquidation this summer would continue into the fall and clog the system. But Perillat said so far that doesn’t seem to be happening. “We’re getting a pretty normal fall run,” he said in early October. “We’re not seeing huge volumes flooding the market at this time, so that’s positive compared to where we were two months ago.” Wasko said the fall run early in October looked surprisingly strong price wise, considering the high cost of feed that would normally mean lower calf prices. She said buyers are willing to go higher than they normally would because of a bullish outlook for live cattle futures in Chicago. Page 3
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BY RON FRIESEN