Bad News: low margins, no new farmers and everyone remembers the lean years

Good News: record prices for beef in 2015

By Tom Collins

LAMBTON — Perth Cattlemen’s Association past-president Doug Laidlaw has two sons. One went into dairy. The other just started raising chickens. They winced at beef.

As beef prices continue to hit record highs and deplete herd numbers, farmers remember the lean years and the beef farming exodus continues — even when the forecast looks bright.

Last month, Agriculture and Agri-Food Canada released the 2015 Canadian Agricultural Outlook and projected that “cattle producers, who normally operate on relatively low margins, will see record profits as live animal prices remain at high levels and feed grain prices continue to be soft.”

Laidlaw, who runs a 200 to 300 head beef operation between Listowel and Atwood, said older farmers have been leaving the industry since BSE in 2003, and there’s no one to replace them. Young people aren’t interested in beef as costs are too high. He estimates that 50 per cent of Perth beef farmers have left the industry since BSE hit in 2003. Beef Farmers of Ontario has no figures on how many beef farmers there are in Ontario.

“The feathers and the dairy have given guys opportunities to get out and have a good pension,” Laidlaw said. “The ones that were stubborn and hung on are the only ones that are left. Nobody wants to be in beef. They’ve seen the rough ride over the last 10 years.”

Laidlaw believes beef prices are at their peak, figuring that consumers will switch to other meats if prices get any higher.

A 500 to 599 lb. heifer sold for an average of $160.23/cwt across Ontario in the third week of February last year. This year, heifers of the same size sold for an average of $244.55/cwt.

Ralph Eyre, president of the Lambton Cattlemen’s Association, said prices will probably stay high for the next few years as it will take a while for the Ontario beef herd numbers to increase. At the same time, a lot of farmers have left the beef industry in just the last few years to switch to cash crops, he said, explaining that feed costs were up and there was money to be made in field crops.

“The (beef) market is strong, so it’s a good time to (sell and) get out of the business,” said Eyre, who has 100 beef cows on his cow-calf-to-finish operation in Brigden, south of Sarnia. But that good news is also bad news. The high price of beef and soaring land prices are a barrier for new farmers to get into the business, he added.

Garnet Toms, the new Eastern Ontario director for the Beef Farmers of Ontario, said it may take incentives to get cow numbers back up. One idea is a heifer retention proposal. A beef farmer would get a payment from the BFO for every heifer retained to cover feeding costs. Toms said beef numbers will continue to decline for the next few years as older farmers leave the industry.

“Since BSE hit (in 2003), the cow-and-calf guy has just been keeping his head above water and hasn’t replaced any machinery or any equipment over the last 10 to 15 years,” he said. “Over the next three or four years in the cow-and-calf sector, farmers will be selling all their stockers, including heifers, so they can take that money and upgrade their equipment.”