STIRLING — It seems 2020 had one last nasty surprise in store for the beef sector.
The largest federal slaughterhouse in the province and one of just two still open had to temporarily wind down operations last month. Cargill’s processing plant at Guelph processed as many as 9,000 head a week, the vast majority from Ontario feedlots. That’s about three of every four animals processed in the province, said BFO feedlot director Jack Chaffe.
The response was swift. Beef Farmers of Ontario started lobbying and within days of the announcement, the federal government re-opened the Cattle Set-Aside program, where they help cover the costs to feed cattle. Fortunately for producers the plant had started to re-open by Dec. 29 and processed 1,600 cattle on Jan. 2, Chaffe said. The plan was for the plant to ramp back up, but the backlog was at least a month long, he said. On Jan. 4 he shipped cattle that were scheduled to have left a month earlier.
Chaffe said the government will pay producers $2 per head for feed costs for up to 500 animals for up to 63 days. But the funds are coming out of 2020’s cash pool so intake will only last until the end of the month. Feeding cattle costs around $4.25 a day, Chaffe said. “It’s terrible. At least (with BSE) we could get them processed.”
The money will help, but it’s only easing the pain, and many producers have already had a tough year. Multiple plant shutdowns across the country and the closure of Ryding Regency in Toronto in Dec. 2019 have already put severe pressure on many farmers and cost them a lot of money. Provincial plants have done what they can to pick up the slack but they’re few and far between and considerably smaller than the federal plants.
The one small saving grace is that this is usually a less busy time of year for feedlots. Most feeder cattle have been traded and moved and there’s usually fewer fed cattle on the market. A good corn crop and excellent weather, however, meant those cattle were growing extremely well. “It’s frustrating that you have good cattle you can’t send anywhere,” said Chaffe, who raises about 3,000 animals a year in Western Ontario and, for the first time in some time, he doesn’t have any beef for himself. “We can’t get a beef processed to put in our own freezer.”
For feedlot operator Darrell Russett at Stirling, in Hastings County, this time of year is as busy as any other. Normally that’d be sending cattle, but this time it’s taking care of them. He had 200 head of his 1,000 that he couldn’t send last month, and he’s feeding “12-15 tonnes of corn a day just to keep filling these cows that should be hanging,” he said. He applied for the set-aside program but it’s “only a drop in the bucket anyway.”
Like many farmers, he’s relying on his equity to carry him through this latest crisis. Margins have been getting smaller for at least the past decade, but they’ve at least stuck around. “Now (that) this has happened, margins are gone. We’re farming at a loss.”
“There’s not ways to save money. There’s ways to fudge the figures to make it look you’re not losing quite so much. But in the long run you’re losing it, because you’re eating equity to do it.”
And farmers can only eat their equity so often and for so long. Feedlot director Jack Chaffe said many farmers had already pushed their equity to the limit before this happened. “I don’t know what the fallout will be after this. There’ll likely be a few that question what their plans are for the next few years.”
