I thought I should start off the year with a bit of an assessment of where the cattle industry is at here in our part of B.C.
Around us, the B.C. government seems to be committed to growing the industry and expanding the basis of the industry, which is the forage, or grass range/pasture.
However, the cattle herd, which was reduced after the BSE crisis, is not really growing. Canada — wide, according to Charlie Gracey, a great person in the cattle market analysis business, ranchers are not retaining replacement females to rebuild the herd.
Why is this? Probably the answer is partly the ever-aging rancher and slow recruitment of the next generation of manager/owner. That sounds like more work and worry.
The other part of the answer is that the profitability is still challenging. While there were several years of improved prices which put most ranchers in the financial positive on the profit and loss statement, prices are back down to just above the breakeven point for most.
A drop in demand for cattle has meant profits have slid lower. You might think that would bring lower prices for breeding stock and it has but not so low that one might buy low and then sell high later in the cattle cycle.
Buying replacement mother cows and heifers is still relatively high, but affordable, if you are profitable.
The other advice, Charlie Gracy is giving is to wait to grow until demand pulls the market. Don’t just grow cattle and hope to sell them.
Consumption of beef is not growing in Canada. The middle class of Asia (China) is interested in our affordable protein. For the most part supply contracts are not in place and would not be with the producer of calves and feeders at this point but that might come.
In anticipation, the B.C. government along with some in of the industry are writing a business plan for a federally licensed slaughter plant in Prince George which could take every head of cattle we can produce in B.C. for export and for B.C. consumption.
The other piece of the “plan” that would need to be in place is the feeding/finishing infrastructure: backgrounding (getting ready to finish) and the finishing pastures (for grass fed/finished) as well as finishing operations.
Forward — looking ranchers will check out this opportunity. It won’t be risk free, but the promise is greater than the same old: growing calves to ship to the grain country for finishing (Alberta, U.S.) and shipping back to the B.C. market and the Pacific Coast terminals.
Carbon footprint will matter for an industry with pretty high emissions at the present time. Growing and finishing cattle with less fossil fuel and emissions from grazing and grain feeding is the other part of the challenge, which is being addressed by the agriculture industry and government.
David Zirnhelt is a member of the Cariboo Cattlemen’s Association and chair of the advisory committee for the Applied Sustainable Ranching program which started at Thompson Rivers University in Williams Lake this January.
