Cattle economics in Alberta

[Alberta farmer]

In Alberta this year we had a pretty tough drought. Hay prices are pretty well in that 6 to 8 cent/lb. range. Due to poor pastures a lot of people are going to have to start feeding fairly early. With a lot of luck we can turn cattle out May 10...if we didn't eat the pastures down too hard the year before.
Does it make sense to feed 225 days a year(30 lb/day) at a cost of about $2.10/day/cow(about $475 for feed alone)?
Straw can be added to a ration but unfortunately there is not a lot of straw and I suspect it will be pricey? On top of all this hay, and maybe straw, will have to be brought in from quite a distance and the trucking costs will be a real problem.
The prices for calves, yearlings and cows continue to fall....and probably will esculate as the cattle come off pasture. I suspect average calf prices will be way down? Unlikely to get enough to pay for the cows intake this winter?
My neighbor bought a load of horse hay yesterday. 34 big rounds(1250 lb.) at $100/bale and an $8/bale trucking charge. I guess horses are such money makers they can afford to pay!
Most cattle producers up here are saying they either intend to liquidate or cut their herds drastically. I wonder where the cattle will come from to fill the feedlots next year and keep our two big packers running? We might see a lot of feeder cattle imported from the US border states. Wouldn't that be a change?

 

[Jogeephus]

Does it make sense to feed 225 days a year(30 lb/day) at a cost of about $2.10/day/cow(about $475 for feed alone)?

I guess this would depend on what you are raising. Might could pull it off if you were raising registered stock but for me in my particular situation, I don't think I love cattle that much and would probably shift to raising hay or something else.

Hope you get some rain soon. And good luck.

 

[edrsimms]

In Alberta this year we had a pretty tough drought. Hay prices are pretty well in that 6 to 8 cent/lb. range. Due to poor pastures a lot of people are going to have to start feeding fairly early. With a lot of luck we can turn cattle out May 10...if we didn't eat the pastures down too hard the year before.
Does it make sense to feed 225 days a year(30 lb/day) at a cost of about $2.10/day/cow(about $475 for feed alone)?
Straw can be added to a ration but unfortunately there is not a lot of straw and I suspect it will be pricey? On top of all this hay, and maybe straw, will have to be brought in from quite a distance and the trucking costs will be a real problem.
The prices for calves, yearlings and cows continue to fall....and probably will esculate as the cattle come off pasture. I suspect average calf prices will be way down? Unlikely to get enough to pay for the cows intake this winter?
My neighbor bought a load of horse hay yesterday. 34 big rounds(1250 lb.) at $100/bale and an $8/bale trucking charge. I guess horses are such money makers they can afford to pay!
Most cattle producers up here are saying they either intend to liquidate or cut their herds drastically. I wonder where the cattle will come from to fill the feedlots next year and keep our two big packers running? We might see a lot of feeder cattle imported from the US border states. Wouldn't that be a change?

I read these posts and I have to wonder what most of you people are thnking about on a yearly basis. Of course the economics of that situation does not look too good, but you have to look beyond your backdoor for a solution to your problems sometimes.

For instance out in the Northwest the largest grass producers in North America are in Oregon and Washington State. A decade agao the granola munching misfits in that area made it impossible for these grass seed producers to burn their fields off, so now (and for the past decade) they have been having to bale this grass and dump it in a big hole-- 10,000's of bales. What a great source of hay if you have NONE.

So you buy this hay, for little of nothing and you buy a haymaster injection system (which will pay for itself in ONE season) and you inject these grass bales to improve your Crude Protein---- simple. This Protein injection costs $1.50 per ton to treat your hay--- it's cheaper than dirt.

Just look beyond your backdoor and the solution to all your troubles is there waiting for discovery.

Ed

 

[1982vett]

I read these posts and I have to wonder what most of you people are thnking about on a yearly basis. Of course the economics of that situation does not look too good, but you have to look beyond your backdoor for a solution to your problems sometimes.

For instance out in the Northwest the largest grass producers in North America are in Oregon and Washington State. A decade agao the granola munching misfits in that area made it impossible for these grass seed producers to burn their fields off, so now (and for the past decade) they have been having to bale this grass and dump it in a big hole-- 10,000's of bales. What a great source of hay if you have NONE.

So you buy this hay, for little of nothing and you buy a haymaster injection system (which will pay for itself in ONE season) and you inject these grass bales to improve your Crude Protein---- simple. This Protein injection costs $1.50 per ton to treat your hay--- it's cheaper than dirt.
Just look beyond your backdoor and the solution to all your troubles is there waiting for discovery.

Ed

I don't care how cheap your injections are. $2.00 a mile still $2.00 a mile and the cows won't pay for it.

 

[edrsimms]

I am talking about the area in Alberta and not in Texas and it is much better than paying $108 per roll so read the post before you make stupid assumptions to it. Texas is another story all together, we have been sending hay to Texas since May -- so stop your whining

I read these posts and I have to wonder what most of you people are thnking about on a yearly basis. Of course the economics of that situation does not look too good, but you have to look beyond your backdoor for a solution to your problems sometimes.

For instance out in the Northwest the largest grass producers in North America are in Oregon and Washington State. A decade agao the granola munching misfits in that area made it impossible for these grass seed producers to burn their fields off, so now (and for the past decade) they have been having to bale this grass and dump it in a big hole-- 10,000's of bales. What a great source of hay if you have NONE.

So you buy this hay, for little of nothing and you buy a haymaster injection system (which will pay for itself in ONE season) and you inject these grass bales to improve your Crude Protein---- simple. This Protein injection costs $1.50 per ton to treat your hay--- it's cheaper than dirt.
Just look beyond your backdoor and the solution to all your troubles is there waiting for discovery.

Ed

I don't care how cheap your injections are. $2.00 a mile still $2.00 a mile and the cows won't pay for it.

If you want to sit around the country store and be a whiner --fine-- quit-- get out sell out-- but stop the whining

 

[hillsdown]

I have to laugh my @ss off about this.

There is no hay or crops in Alberta not even shytty ones that is what a drought is. Also Alberta is a large province and to ship anywhere if you can find it, is very expensive. I think people need to take a trip across Canada to realize just why we are the second largest country in the world. We usually provide hay and forages for other provinces as well as south of the border. Year after year you see truck load after truck load heading across the border so usually all the stock piles are sent to bale others out that are drought stricken or flooded.

BTW I am not whining ,life is too short to post on here and say poor me.

I will cull hard and end up In five years with a better herd than if I could keep them all. It will actually fast track me into a top herd faster than if I held onto some lesser genetics and tried to breed up. BUT I am a seed stock producer and mostly AI ,I guarantee you those that want to buy a bull next year for there herd will be paying more than they have ever before because it will cost us alot to feed your future herd prospects. So in the end I am sure we will come out ahead or at least even steven. I do hope some of these commercial and seed stockers sell out and animals go straight to slaughter it will get rid of a lot of crappy cattle and poor operations that have only been able to stay above water do semantics.

It is too late for rain lets harvest what little grain and cereal crops there are and move on. BTW expect your cereals and breads to go up significantly this year as well. Oh I guess our shytty situation will effect all you as well. ;-) But you can always get imported crap from a 3rd world country where there are no regulations and they are allowed to spray banned chemicals that will kill you and your pets. 8)



There ,my rant for today is done.. You all have a great one, I am off to enjoy a beautiful sunny day :tiphat:

 

[1982vett]

I am talking about the area in Alberta and not in Texas and it is much better than paying $108 per roll so read the post before you make stupid assumptions to it. Texas is another story all together, we have been sending hay to Texas since May -- so stop your whining

I read these posts and I have to wonder what most of you people are thnking about on a yearly basis. Of course the economics of that situation does not look too good, but you have to look beyond your backdoor for a solution to your problems sometimes.

For instance out in the Northwest the largest grass producers in North America are in Oregon and Washington State. A decade agao the granola munching misfits in that area made it impossible for these grass seed producers to burn their fields off, so now (and for the past decade) they have been having to bale this grass and dump it in a big hole-- 10,000's of bales. What a great source of hay if you have NONE.

So you buy this hay, for little of nothing and you buy a haymaster injection system (which will pay for itself in ONE season) and you inject these grass bales to improve your Crude Protein---- simple. This Protein injection costs $1.50 per ton to treat your hay--- it's cheaper than dirt.
Just look beyond your backdoor and the solution to all your troubles is there waiting for discovery.

Ed

I don't care how cheap your injections are. $2.00 a mile still $2.00 a mile and the cows won't pay for it.

If you want to sit around the country store and be a whiner --fine-- quit-- get out sell out-- but stop the whining

Hmm, I might be whinning about no rain, but rain or not doesn't change the economics of hauling hay a thousand miles (even if you dig it out of a big ass hole!)

 

[Stocker Steve]

Ship young females to a better watered location for wintering?

 

[Alberta farmer]

Steve: I don't think there are many areas in western Canada where cattle could be shipped. There isn't any area that could absorb the numbers that need to go.
The drought really is just the last nail in the coffin. Cattle prices up here haven't been very good for about 6 years. The average age of producers is around 60 and I guess they don't love those cows enough to continue losing money.
I guess we must all be idiots for not getting all that cheap Washington hay up here. You would think there must be at least one Alberta cattleman who isn't an idiot and would give it a whirl?
I don't think I was whining...just saying how it was? For myself the decision has already been made.
Hillsdown: You make some good points. I hope there are still some bull buyers around by next year? A lot of those "crappy cattle" and "poor farmers" have been around for a long time. Who will replace them? What will happen to that land? In my case I have breaking disc guy already booked. Pasture and hay land going into more crop land for cash rent.

 

[Jogeephus]

AF, I feel for you and know its a hard decision to make but I'm sure you will make a wise decision. Its a tough day when you can do everything in your power to make something work but the weather or politics only works against you. I was in the same situation a few short years ago and I am still feeling the effects of the drought. Seems ya'll have had a bad run of things with the mad cow scare and now the drought. Almost like a one two punch. I can't help but think we ALL are very close to living the same nightmare as you have. Again, I feel for you and hope things turn around for the better. Best of luck.

 

[mnmtranching]

These droughts are regional across North America every year. We've been in severe drought the last three years this year it rained. We were better of because plenty of hay was available within around 120 miles or so. The highest I paid was $120 per ton for good mixed hay. Your situation is worse. I realize the distance, there will be an abundance of good hay in the 70-80 $ range. Wish we could get it there.
There is no simple answer. I sold off 1/3 of the cow herd [wish I had them back] I think I did the right thing by cutting back on cattle. I'll save heifers and get back up there in a few years.
I think you good managers will pull through, next year it will rain. :nod:

 

[Stocker Steve]

The big thinkers expect a long term boom in commodity prices due to population growth and standard of living expectations. Certainly there is a boom today in K prices, fencing material, seed, lime...

The current issue is these higher input costs is the contrast with lower demand for meat and milk in North America. Value of gain has been trending down and I estimate that it is in the $0.65 to 0.75 per pound range here for heavy yearlings.

Judy Greg thinks the cattleman' advantage is being able to produce beef with "no inputs." I am not there but I am buying in less each year. I am currently going through my reciepts and laying out a budget for 10/1/09 to 10/1/10. Cost control is not fun but that is where I need to focus right now.

 

[john250]

OK, my drought experience is 2007. I culled and culled, but I still kept too many. It cost a fortune. Cull prices were in the tank, but every one sold was one I didn't have to feed.
Around here, we have abundant corn and I fed 5 lb/day to a 1100 lb cow. Plus 10 lb hay, imported from Wisconsin. The corn was cheaper per lb than the hay, and corn is very dense nutritionally. That was my least cost ration, based on what was available. They came through winter looking good. BCS 3 on average.
Someone has a drought every year, and if you leave the fences in place you can buy back in when you get rain.
You folks in drought areas have my sympathy. A real true doubt is a soul scarring experience. I hope I learned a few good habits during my drought years. Weigh feed. Sharpen your pencil. Decide what you really want to do. And good luck to you all.

 

[Bez+]

Most folks can survive a drought.

From what I am reading here there are many down south that have little to no idea about how it really works up here.

Unfortunately drought is not the killer in many parts of Canada.

It is the COMBINED EFFECTS of drought AND low prices PLUS high costs.

Hauling hay for two bucks a mile? Try three or better - if you can get someone to haul for two you are related, extremely lucky or a bullschitter.

Fuel on average is about 20% higher in most places than that south of the border - despite Canada being a net exporter of gas and oil.

Taxes - personal and business are easily 20 - 30% higher than down south of the border - so we all grin when we hear you guys complain about taxes. We wish it was as good up here.

Regulations are expensive - and we are now required to bear the expenses of ID and records. Feed records are also a nightmare.

Free trade has not benefited the ag producer - it may have benefited the ag industry - but the primary producer still pays prices that would make the average Yank shudder - take Ivomec as a small comparison. You buy it far cheaper - cannot remember the numbers but I remember the percentages - same product and same volume - it was 23% higher in Canada than down south - that was brought up again last week as my wife is the Prez of the local cattle association.

My parts are higher. One single starter for our tractor up here was near 900 bucks new at the Case dealership - I bought it in the US for less than half price and lied through my teeth to get it home.

Deads cannot be hauled to the back and dumped - although many still do - they must be "disposed of" and you bear that cost as well. Get caught dumping and you pay a stiff environmental fine.

Ontario and provinces east are going to mandatory set backs from water - meaning you let an animal walk in a creek you will be heavily fined. And you will be required to put up a fence that passes inspection - or it will be done for you and you are billed. Blame Department of Oceans and Fisheries for this one and it has already hit the more easily accessed areas and the populated areas - as the profile is a lot higher.

SPCA now pretty much has coast to coast rights of access. So - hate your neighbour? Call in an anonymous complaint. SPCA shows up - no warrant required. Police escort ALWAYS.

Last week a 73 year old man was placed in hand cuffs and arrested within a few miles of our home. His crime? No one knows - no charges laid - but he spent the night in jail for PEACEFULLY - in front of witnesses - protesting the visit. Made it into several papers.

By the way - SPCA is required by law to keep complaint origin confidential - so you can have a ball with a lot of neighbours of you really want to.

Then - the distances required to haul to market - I am always astounded when I see someone telling me they have more than 10 sale barns within two hours drive.

Try one place to haul to within 8 hours - not uncommon. I have one within 2 hours. One more if I drive nearly 4 hours and one more if I go about 6 hours.

As I have stated in the past - if Canadians had even a pinch of the assistance provided by federal and state agencies south of the border it might be the saviour. We do not have a fraction of your assistance. I have posted a web site on this site that shows how much money each US farmer / rancher receives in cash grants and subsidies if they participate in programs. I can tell you that all the subsidy money I received during BSE did not fill my truck with fuel once the government tax man, the accountants and the lawyers were done helping us out.

I am not saying everyone down south gets the cash - but if you participate in the programs you do - we do not have those programs.

The feds are planning to provide loan guarantees - if you want more debt. But you still need to pay it back or sell your assets if you cannot. All the guarantee does is get you the money - you still bear all the risk. The agriculture safety program has failed to the point that a large majority of operators do not even qualify - I know - we are one of those.

In fact this program is now reviewing its books and attempting to RECOVER monies paid out about three years ago - my neighbour is on his way to court over this - it may mean foreclosure of his operation and forced sale. Hard to believe, but true.

So - Alberta farmer is quitting. He is only one of literally hundreds if not thousands.

I hear folks say it should be a labour of love or get the helll out of the business and stop bittching about how tough it is.

Unfortunately the reason folks are getting out is all of the above plus pricing control of major packers - most of whom are closing plants for reasons of centralization - so we haul even farther.

No one really gives a schitte about food until it is gone.

Perfect storm is driving many out right across the country.

I only wish it was drought alone.

Bez+

 

[john250]

If it is any consolation, Bez, the US is headed the same direction on most of those points. And any subsidies we get are reflected in our costs.

 

[Bez+]

If it is any consolation, Bez, the US is headed the same direction on most of those points. And any subsidies we get are reflected in our costs.

In truth I am not sure I understand your comment about subsidies and costs. I have heard you say it before - but the cost of a gallon of fuel is not dependent upon your subsidy. Either way a subsidy does reduce your overall cost - perhaps I am missing something and you need to simplify for this dummie.

First - your government supports ag - we wish ours did.

Second - I wish I could let land lie for 20 years and get paid for it - I think you call it CRA - I cannot - and I know not everyone in the US can - but many can and do - this program does not exist in Canada. Corn, wheat, beans, cotton and barley are heavily supported by the State and Fed governments subsidies and cheques are delivered from the feds regularly - we do not get any. So when we talk how things work north and south - we are often talking apple and oranges. I can - but will not - provide specific examples of people - all open access - down to the dollar that they receive every year - all you need is their address and you can find them on the web - you need the site I will be happy to provide. You can look them up yourself. Some are making big dollar subsidies - so profit from cows is not always required.

For us - we make a profit on the cow or we are dead meat.

Third - It takes only about two or three western US states to not only equal - but actually exceed our entire national ag budget

Fourth - we could not charge people money to hunt our land - so far it is illegal in most if not all areas.

Finally - am not p!ssed at you for this - although I do admit to a great deal of envy - I only wish my own country would recognize the value and importance of ag. As an example - the second largest job provider in Ontario and Alberta is ag. I think Manitoba and Saskatchewan ag is number three but do not quote me.

Not one dime of "stimulus" money. Yet the big three auto thieving barstards got a tonne - and almost all of it went out of country!

Ag is fine in Canada - as long as one person works off farm - better if two do - there are very few farms and ranches that are 100% self supporting any more.

Alberta farmer is only one of many that has decided to stop working for nothing to feed people who bittch about the cost of a steak.

Cheers

Bez+

 

[Alberta farmer]

I already have some crop land that I rent out on a crop share deal. The renter is a relative and does a really good job. I pay one third of the crop inputs and get one third of the crop. He markets the whole thing as he sees fit and he also decides what to plant, inputs etc. I provide the grain bins and give him a free hand once in awhile.
I have never got less than $50/acre in over 15 years of renting this land out. Several times have got over $100/acre on canola. Usually I average close to $80/acre.
Most(not all) of my land can be broken up for crops. The land that can't is either too wet or too hilly but is a fairly small portion.
I quite growing crops around 1994 when Canada scrapped the Crow freight rate. I needed to upgrade some equipment if I was going to stay in grain and I just didn't feel like putting out the money.
I am getting older(55) and want to take it a little easier. I have a summer business that I enjoy that pays pretty good. We will all quit farming sooner or later....one way or the other!

 

[john250]

In truth I am not sure I understand your comment about subsidies and costs. I have heard you say it before - but the cost of a gallon of fuel is not dependent upon your subsidy. Either way a subsidy does reduce your overall cost - perhaps I am missing something and you need to simplify for this dummie.

They are government programs, and simplifying them is like asking me to simplify the law--not easily done.
The CRP (Conservation Reserve Program) takes highly erodible or other environmentally sensitive land out of production for 10 yr contracts. The landowner gets rent from the gov. The land cannot be cropped or grazed.
Generally, if some land is removed from production the remaining land will command a higher rent, be it for grazing or cropping. That is why I say our subsidies get factored back in to our costs.
The programs for corn, wheat and soy keep farmers producing in times of low prices. That stabilizes the demand for fuel, fertilizer and seed to plant acres which might otherwise go fallow some years. Input prices never go down, it seems.
Your point is well taken about the effect on Canada. Being next door, our subsidies would tend to keep your inputs higher than they would be otherwise. The seed and fertilizer companies will send product where it can be sold for the highest price.
Pardon my poor explanation, but even the people who administer our programs struggle to explain them.