Rising costs hurting cattlemen

Cattle prices are rising in Canada, but local cattlemen say costs have risen even faster and many full-time cattlemen are having to leave the business.

Cattle prices are rising in Canada, but local cattlemen say costs have risen even faster and many full-time cattlemen are having to leave the business.

Statistics Canada reported last week that national cattle and calf prices jumped 16.5 per cent from June 2010 to June 2011.

But the same report also attributed that price jump to record-low herd numbers across North America. The Canadian and American herds have shrunk to their lowest levels since 1994 and 1973, respectively—the years those numbers were first recorded.

“Cattle prices have gone up for the first time in years. Unfortunately, so have all the other prices that pertain to the livestock industry,” said Kathy McKilligan, secretary-treasurer of the Skeena Regional Cattlemen’s Association.

The cost of diesel is way up, she said, as are the costs of twine and plastic to put up hay.

Taking all the rising costs together, McKilligan said the price of getting cattle to market has doubled since about the time of the mad-cow crisis in 2003 and 2004.

“This is why you’re finding that a lot of the older ranchers are going out of the business,” she said. “And there are very few younger people coming in.”

A bright spot in all the bad news is that people who run ranches on the side are hanging in pretty well with the higher prices, she said.

The average rancher in the Bulkley Valley now keeps somewhere between 50 and 80 head of cattle, she said, because they have logging, sawmill, or other jobs off the farm. That trend—taking a second job to subsidize a small herd—is something that became a lot more common after the mad cow years, McKilligan said. To make a living solely on the ranch, a cattleman generally has to keep about 200 cattle or more.

“We’re still not breaking even,” she said of full-time producers.

Still, having recently sold two culled cows  $900 a piece, McKilligan said she hopes these high prices hold. During the mad cow years, cattleman actually had to pay $35 to take culled cows off their farms. That put a lot of full-time ranchers into debts they are still climbing back from now.

Analysts say the cattle industry only returned to profitability about a year and a half ago, and there are many factors—such as a high Canadian dollar—keeping herd numbers down.

According to Agriculture Canada, North American cattle herds do tend to expand and contract in a roughly 10-year cycle. Some analysts expect herd numbers to begin building again around 2012, but it is too early yet to say whether the long-term decline in the total herd size will continue.

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