Feed weekly outlook: Alberta feedlots prepared for supply issues

Beef producers seen struggling

feedlot
(Photo courtesy Canada Beef Inc.)

CNS Canada — Many regions of the Prairies expect some feed shortages this year, but Alberta feedlots have plans ready to deal with those issues.

Bryan Walton, CEO of the Alberta Cattle Feeders’ Association, said overall conditions appear decent, although producers in drier areas have silaged barley rather than wait for harvest because of lighter crops.

Northern crops appear to be faring better and he doesn’t expect Alberta feedlots will see much wheat go for feed because of the good-quality crops being grown.

Overall, he said, cattle feeders may be looking for other sources. “I wouldn’t be surprised if you saw (U.S.) corn coming in this year,” he said.

Feedlot operators “will do whatever they can. You have to feed the cattle, right?”

But for beef producers, it’s a different story, where thin feed supplies are likely to spark herd reductions.

Todd Lewis, president of Agricultural Producers Association of Saskatchewan, said producers have some tough decisions to make this winter as they evaluate feed and forage supplies.

Producers will have a better handle on feed grain supplies as harvest progresses, he said, but most cereal crops look to be of reasonable quality and he expects little will be downgraded to feed.

APAS has asked the federal government for an early decision on allowing producers to defer claims on income generated from livestock sales, to avoid paying taxes on those sales this year.

Lewis said the fall calf run is probably going to start a couple of weeks early in Saskatchewan; in Manitoba, the government has opened up some Crown land for grazing to help ease feed shortages.

Brian Lemon, general manager for Manitoba Beef Producers, said many auction markets there have returned from summer early to open their doors in anticipation of an early fall calf run.

Unless a dramatic event such as widespread frost strikes during harvest, most of the crop is likely of good quality with decent yields, he said. He expects little will become available for feed.

“Feed prices continue to be probably unsustainable for the beef industry,” he said.

He added that he has heard reports that the feed shortage has even reached the dairy industry, and that could potentially add another player competing to buy feed in an already tight market.

That said, beef producers always seem to find feed from somewhere, he said, although it’s starting to look like many will be looking for assistance.

As well, the long-term lack of moisture is becoming a major problem and producers desperately need fall rains and heavy winter snow to replenish surface and subsoil moisture.

“It’s getting to be that we’re going to be looking for assistance for feed, but also for water,” he said.

ACFA’s Walton said that during meetings he has had with several feedlots, the issue of longer-term feed supplies never even came up. That illustrates how little of a concern it is for that side of the industry, he said.

“These guys, they manage their way through these things. It’s just the way they operate.”

The large irrigation infrastructure in southern Alberta saved many crops there, he said, but he expects some barley will come in lighter than usual.

He agreed drought in Europe, Australia and Russia could drive prices higher this winter as buyers look for alternative supplies, but he said that export market will probably focus more on high-quality cereals.

“The feedlots here are full and the fall run is about to start,” he said, adding there is no sign that feeders are looking to shed animals.

“We’re seeing some expansion going on. These guys are bullish on the future.”

The best news the industry could receive this week would be of a successful deal on the North American Free Trade Agreement, he said.

Canada and the U.S. are currently in talks, following an informal deal reached between the U.S. and Mexico on Aug. 27. A deadline for Canada-U.S. agreement on a preliminary deal is Aug. 31.

Calvin Vaags, who operates Clover Spring Farms, a feedlot with 1,500-2,000 animals near Dugald, Man., said he plans to feed his animals mostly from crops he grew himself, although he will probably have to buy more at some point.

Feed grain prices might be a bit higher than normal, but the more pressing problem is forage supply.

Feed barley bids on Tuesday in Manitoba, delivered to the elevator, were $4.20-$4.50; in Saskatchewan bids were $3.83-$4.40 and in Alberta bids were $5.

Feed wheat bids delivered to elevator were $4.65-$5.85 in Saskatchewan; $5.64 in Manitoba; and $6.31-$6.91 in Alberta.

— Terry Fries writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting. Follow CNS Canada at @CNSCanada on Twitter.

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