My Perspective - Seeing green in cattle

Details

Published on Thursday, August 31, 2017

Kate Jackman - Atkinson 
The Neepawa Banner

A lot has changed in a decade. When I first came to the area, cattle producers were in the depths of a BSE induced depression, but the memories are finally fading. The last few years have been ones of positive signs for cattle producers, both in Manitoba and Canada.  This year is shaping up to be a good one too.

Overall, the future is looking bright. Farm Credit Canada, Canada’s largest agricultural lender, recently said that over the next 12 months, the livestock sector is expected to be the hottest sector in Canadian agriculture. Within the livestock sector, FCC economists estimate that over the next year, cattle prices will rise by eight per cent, less than hogs and dairy, but more than poultry. That’s good news for an industry that isn’t as capital intensive as some. In the beef cattle industry, FCC economists project 2017 revenues will reach $9.0 billion nationally, from $8.6 billion in 2016, and climb a further 4 per cent in 2018, to $9.3 billion.

It isn’t just FCC that’s high on agriculture, in their 2017 report, the Advisory Council on Economic Growth highlighted the agriculture and food sector as one area where Canada has the potential for substantial growth and export improvement.  The group, which was put together by the federal Finance minister and tasked with recommending bold ideas that will significantly improve the country’s economic growth trajectory, focused on Canada’s opportunity to become the trusted global leader in safe, nutritious and sustainable food for the 21st century.

As the industry emerged from the BSE cloud, it was, in many ways, completely changed. Low prices drove many from the industry, to off-farm jobs, or towards other types of farming operations. The end result has been a decrease in both the number of cattle produced in Canada, as well as the number of producers. Statistics Canada’s 2016 Census of Agriculture found that the total number of cattle and calves in Canada decreased 2 per cent from 2011, to 12.5 million head in 2016. In 2016, the cattle and calf inventory was at its lowest since 1986. Driven by strong international demand and drought in the United States, from 2013 to 2015, cattle prices were extremely strong and producers sold their animals.

Canadian producers have been slow to rebuild their herds and Manitoba has lagged other provinces; it seems as though many producers took these high prices as their cue to sell and exit the industry. The numbers point to fewer, but larger operations. Cow-calf operations in particular showed a fair amount of consolidation between 2011 and 2016, when the number of operations decreased by 9.5 per cent, as the average number of cattle on these farms increased 12.5 per cent.

According to Stats Can, cattle prices continue to be tracking upwards, with the cattle and calf index showing the second consecutive year-over-year increase this June. Despite small increases in the Canadian herd and the US registering its largest herd since 2008, demand for beef, particularly from Asia, has kept prices high. It will be interesting to see what the future holds for the cattle industry in Manitoba. Will older producers take advantage of higher prices to cash out and exit the industry? Where will new producers come from?

There’s uncertainty too, the industry relies heavily on exports and it’s unknown what new trade agreements and NAFTA renegotiations will mean. Hopefully, new markets, including Asia, will offset any challenges with established partners.

I’m glad to see that the agriculture industry as a whole is being recognized for its growth potential.  It already employs 2.1 million workers, accounts for 6.7 per cent of the country’s gross national product (GDP) and certainly has the potential to help drive the country’s growth. All industries undergo change and as livestock producers settle into a more stable, and positive, reality, things are looking good for the sector as a whole.