Hay shortage averted, ranchers still losing money

The good news? Hay costs are lower than many feared a few months ago.

A farmer east of Red Deer just south of highway 11 rakes his hay crop into rows under sunny skies on Monday.

The good news? Hay costs are lower than many feared a few months ago.

The bad news? Cow-calf operations are still a losing proposition.

Ted Nibourg, a farm business management specialist with Alberta Agriculture and Rural Development’s Ag-Info Centre in Stettler, says the severe hay shortage that some were predicting hasn’t materialized.

“The situation is definitely not as dire as what some of you media types originally set out to portray,” he said, referring to the spate of doom-and-gloom stories that emerged following the cold spring and subsequent drought.

“It scared the hell out of lot of people, and they panicked and maybe over-reacted,” he said, confirming that some hay did sell for “obscene” prices.

By July, however, rainfall had spurred hay growth and renewed pasture land. Later, extreme weather damaged some canola and grain crops, resulting in them being converted to green feed.

Another significant factor keeping hay prices in check was reduced demand.

Statistics Canada’s July 1 cattle inventory indicated a 9.5 per cent decline in Alberta’s beef cow herd, said Nibourg.

“The auction marts got so inundated they had to ration the amount of cows coming in.

“I think when we get our Jan. 1 numbers, we’re going to even see a more substantial decline in our cow numbers.”

Currently, hay for beef cattle is selling for between four and 4.5 cents a pound, said Nibourg. That’s far less than the $100-plus price per bale some were forecasting in June, but still exceeds the point where cow-calf producers can make a buck.

At 3.5 cents a pound, he said, a farmer would will lose about $20 an animal based on fall calf price projections. Bump that feed cost up to six cents a pound, and the loss swells to $80.

“These guys can’t afford to sell off their farm like that and remain in business. That’s why they’re pulling the pin.”

Doug Sawyer, a director and the finance chair with the Alberta Beef Producers, confirmed that many producers have sold their breeding stock or are talking about it. He hopes reduced cow numbers will bring some relief to the farmers who remain.

“The old supply and demand thing will kick in, hopefully.”

Unfortunately, said Nibourg, the strong loonie could prevent this.

“As the dollar goes up, our prices come down.”

Sawyer acknowledged that the dollar is a “huge factor,” and a weak market for fat cattle isn’t helping demand for calves.

“It doesn’t look very optimistic for this fall run, to me.”

The fact also remains that hay yields were down this year. And cow-calf operators like Sawyer, who farms near Pine Lake, must still feed their young animals.

“I’ve either got to take my calves somewhere to be custom-fed, in a feedlot, or sell them, because I simply don’t have any hay to feed them.”

By rights, said Sawyer, he should get out now. But he’s hopeful better times lie ahead, and after 25 years doesn’t want to leave the industry.

“My farming enterprise — I keep telling everybody — is a lifestyle, not a business arrangement.”


Just Posted

Red Deer property taxes to go up 2.15 per cent in 2019

City council approves $369.8 million budget

Sylvan Lake council approves concept plan for new park

Pogadl Park will eventally be home to numerous ball diamonds and sports fields

One person dead after collision on Highway 2A

Pickup truck and grain truck collided on Highway 2A south of Carstairs

Updated: Trial stalls for man accused in fatal Canada Day 2016 crash

Defence lawyer argued relevant information received only hours before trial to begin

Trudeau says politicians shouldn’t prey on Canadians’ fears

The Prime Minister was speaking at a townhall in Ontario

UPDATE: B.C. boy, aunt missing for three days

The pair are missing from Kamloops

Liberal bows out of byelection after singling out Jagmeet Singh’s race

Karen Wang says she made comments online that referenced Singh’s cultural background

Shooter pleads guilty to manslaughter in Stettler

A Stettler man charged with second-degree murder has pleaded guilty to manslaughter.… Continue reading

Kentucky canoe outfit borrows photo of Trudeau family to market business

They are in a red canoe, all clad in life jackets, and Sophie Gregoire Trudeau and Ella-Grace are waving

Police chief confirms all three Ottawa bus victims were on board when it crashed

OTTAWA — All three people killed in last week’s deadly bus accident… Continue reading

Theresa May wins no-confidence vote after Brexit deal rejection

UK PM can keep her job, after House of Commons voted 325-306

Alberta doctor accused of sexual assault asked to voluntarily give up practice

College says Dr. Barry Wollach should discontinue his practice, given the seriousness of the allegation against him

Speedy acceptance of Saudi shows refugee system’s flaws

Who would not wish Rahaf Mohammed well? The 18-year-old Saudi wants to… Continue reading

Most Read