When in drought
By Jim Timlick
After a hot, dry summer, some Manitoba livestock producers are considering throwing in the towel. Will the fallout persist into the future, or can lessons be learned from a difficult year?
By Jim Timlick
Scott Anderson has been involved in the cattle auction business for more than 30 years. But of those three decades, Anderson, the co-owner of Winnipeg Livestock Sales, can’t remember a more tumultuous summer sales season than the one that just passed.
Record heat, dangerously low precipitation levels and a resulting drought combined to force many beef producers in affected areas to sell off their livestock because they didn’t have the hay or grass needed to feed them. The situation was so bad in some parts of the province that the Canadian Drought Monitor deemed it a twice-in-a-century event and gave it its most severe drought ranking on the federal agency’s rating scale. Similar drought conditions were seen in the midwestern United States and beyond – according to the National Oceanic and Atmospheric Administration, on Aug. 31, 47 per cent of the continental U.S. was experiencing drought conditions, an increase from the beginning of August.
While the drought has passed for many of these areas, the ripple effect of the droughts is still being felt.
Although summer is typically a slow time for Anderson’s auction business, that wasn’t the case this year. Far from it, in fact, he says.
“We would typically get between 50 to 200 cattle through the summer months. This summer, we were suddenly getting 1,500 or 1,600, which is typical of October when we’re in the fall run and everybody’s emptying their pastures out,” he says.
“It was due strictly to people not having enough grass. They were having to bring cattle home and feed the cows rather than letting them graze…because there was no pasture for them. It was a bit of a mass exodus in the middle of the summer. A lot of guys were saying, ‘If I have to spend three times as much money on feed as normal, forget it, I’ll just sell the cows.’”
Anderson acknowledged he and his business partners had mixed feelings about the uptick in business this summer. Although it was good for their bottom line, they are concerned it could prompt some beef producers to get out of the game altogether.
“A lot of guys said (increased feed costs) are going to put [them] in a losing position so [they’re] punching out,” he syas.
It’s a sentiment shared by many cattle producers throughout the province, according to Tyler Fulton. Fulton runs a family-owned cattle farm in Birtle, MB and is the current president of Manitoba Beef Producers, which represents 6,300 producers across the province. He calls the situation in Manitoba this summer a “watershed moment” for the beef industry and fears some producers could retire or look for other work if circumstances don’t improve.
“I’m pretty confident it’s already happening,” he says. “Some farmers who were already getting ready for retirement have had enough and some younger guys could not weather the economic storm because they didn’t have the cash flow to be able to support their herds and they’ve taken off-farm jobs that they otherwise wouldn’t have done.”
The situation further west in neighboring Saskatchewan isn’t much different. It experienced another extremely dry summer for the fourth year in a row. The resulting shortage of feed crops forced many beef farmers to adjust herd sizes and could force some producers to get out of the business.
“It’s definitely a concern,” says Ryder Lee, CEO of the Saskatchewan Cattlemen’s Association. “You’ve got to have enough supply to keep your feeders going and your slaughter plants going. There’s a great growth in demand for protein in terms of demand and the willingness to pay for it. The trick is making sure the benefits from that flow all the way back to your primary cattle producers.”
Fulton says one of the concerns about producers leaving the beef industry is the implications it could have on the rest of the value chain. Fewer producers could mean less business for small-town retailers who provide service and support to cow calf operations. It could also mean some farmers may have to take land that is being used for cattle operations and convert it into crop land that may not be environmentally sustainable, he adds.
A sign of things to come?
While everyone in the agricultural sector is hoping this summer’s hot, dry conditions were just a blip, the fact is it could be a sign of things to come. If so, cattle producers are going to have to factor that into management plans for their operations moving forward.
Fulton says government grants and assistance programs like AgriRecovery and the Canadian Federation of Agriculture’s Hay West initiative provided some much-needed help but aren’t a long-term solution to the unique challenges the beef industry is facing. What he’d like to see is the federal government work together with producers to develop a proactive program that would be ready to be quickly taken “off the shelf” to address similar situations in the future.
Lee says producers welcome government support, but cautioned that any such aid has to be managed correctly by the recipients.
“The thing you want to avoid is a pendulum swing that goes farther than it needs to go,” he says. “We need to match up our livestock numbers with what we’ve got to feed them numbers, but we don’t want to go any farther [than that], because that will impact our ability to supply our processing and retail and food service.”
Reexamining standard practices
One of the few positives that could come out of this past summer is that it could encourage some cattle producers to examine new or innovative farming techniques. It could also prompt them to reexamine existing farm practices that they didn’t give much thought to before, including how they graze their land.
Lee says one of the issues a growing number of producers in his province are looking at is adjusting the intensity of grazing on their fields. Changing to shorter, more intense periods of grazing time for their cattle could allow hay and some forage crops to perform better.
Some growers are also starting to take a closer look at incorporating new or different feed crops into their operations that are not only more heat and drought tolerant, but also promote soil health, a development Fulton believes is particularly promising.
“When the industry is forced to consider all these different feedstuffs that they never considered before, it could trigger another round of innovation. It could lead to some better ideas and really change the trajectory of the industry,” he says.
Alex Melnitchouck, chief technology officer, digital ag at Olds College in Alberta, says there is no silver bullet that will eliminate the feed challenges many cattle producers are facing. However, he says there are emerging technologies that could potentially make it easier for them to deal with those challenges.
One of the more promising such tools, he says, is climatology analysis, the study of the atmosphere and weather patterns over time. Although it’s still in its infancy, Melnitchouck explains climatology and long-term weather trend analysis could make planning much easier for farmers and allow them to be more proactive when it comes to making critical decisions about their operation, including what crops to plant and when, as well as to manage agronomic and financial operations.
Another option is the use of variable-rate technology. Although there is a significant upfront cost, Melnitchouck suggests it can improve fertilizer efficiency by as much as 20 per cent and increase yields for most forage crops by up to 10 per cent.
Future looks bright
As dire as the situation in the Prairies was this summer, there was reason for optimism as autumn approached. Late August rains in Manitoba and other parts of the west injected new life into many pastures. Many cereal crops that had been written off were salvaged and provided another source of feed for herds, which at least bought producers some time. Just as importantly, demand and prices for beef remained bullish.
“There’s no doubt that the future looks bright for being in the protein business and high-quality, grain-fed Canadian beef holds a great spot in that,” says Lee. “We just need some cooperation from the weather to continue pumping it out.” •