Central Alberta beef producers are facing soaring feed costs while cattle prices remain steady — not a good combination.
“It’s absolutely crazy,” said Richard Lorenz, of feed prices. Lorenz has about 140 cows on his farm near Markerville.
“I think what’s happening is feedlots are probably pre-buying grain right now. Until the new harvest comes off, there is a short supply and I think they are stocking up and that’s really pushing the price up.”
Barley prices are in the $10 a bushel range, double what they were a year ago.
“We’re getting by. (But) my grain costs for feeding bulls and feeding steers have been just crazy,” he said.
Last year’s drought has played a big role in the current price crunch. Pastures did not come in very well and more farmers had to rely on feed, which diminished supplies and drove up prices.
Last year, feedlot owners and other cattle producers turned to corn from the U.S. transported into the province by rail to make up for shortfalls in home-grown feed.
The cool spring has put pasture a little behind this year, adding to the supply and demand pressure.
“We’re hoping we don’t have to do this in another year,” said Lorenz. “You can kind of suffer through it one year.
“If you get two years, I don’t know. Unless the cattle prices really start climbing, some of the cow-calf guys will just start going out of business. They won’t do it again.”
“They’ll sell their cows. And that’s not what we need because we’re losing a lot of small cow-calf operations.”
The impact of fewer rural people opting to raise cows will be felt far beyond their ranches, he said.
“The small ranchers help their local communities keep going.”
Like many farmers and ranchers in central Alberta, Lorenz is crossing his fingers that the slow start to spring is coming to an end.
“We’re hoping in the next few days we get a nice shot of rain and some more heat. It’s not too late, for sure. But it needs to come soon.”
Jim Wood had about 300 cattle on his farm near Delburne last year, but reduced the herd to 100 as the drought took grip.
“We just didn’t have the grass,” he said.
By cutting his herd by two-thirds he was able to significantly cut his feed costs.
It’s not just barley prices that are going through the roof. Hay is also in high demand.
“Right now, we’re seeing extremely high prices for hay.”
It is not only the beef sector that is facing a financial squeeze. Fertilizer prices are skyrocketing for those who make their living growing barley, wheat, canola, oats, peas and legumes and a variety of other crops in central Alberta.
Fortunately, high commodity prices may offset some of the increased input costs. That has not been happening on the beef side.
“I believe the cow-calf sector has not seen the higher price rewards like the grain farmers have,” he said.