PUBLISHED BY MANITOBA BEEF PRODUCERS
JULY 2020
At a farm near Deerwood, MB. the barley crop has poked through and the cows/calves have come to check out the sights. Producers around Manitoba are watching with interest what the next few months will bring as they remain hopeful for crops to grow and be harvested as well as a strong market for the calves. Photo credit: Jeannette Greaves
COVID-19 upends cattle industry Manitoba cattle producers are bracing for a possible second wave of COVID-19 later this year after an initial wave this spring disrupted cattle sales and slaughter. The pandemic swept through much of Canada’s beef packing industry in April and May, shutting down Cargill, the country’s largest slaughter plant in High River, Alberta, and slowing work at several others. The concern now is whether the virus will return with a vengeance and upset the beef industry again, said Dennis Laycraft, Canadian Cattlemen’s Association executive vice president. “With this unease looking forward, we’re wondering what we’re going to be dealing with this fall. Are we going to see a second wave of COVID-19?” Laycraft said. The Cargill plant was idle for 14 days, including 10 actual kill days, after workers tested positive for the COVID virus and several died. The disease also reduced operations at JBS Canada in Brooks, Alberta and Harmony Beef north of Calgary. Plants were back operating at near capacity by early June as pandemic restrictions eased and slaughter volumes rebounded. But the slowdown left a backlog of 130,000 fed cattle in Western Canadian feedlots that would normally have been processed. Plants will still be working through the summer to clear the backlog, said Laycraft. In the meantime, cash prices have recovered somewhat after collapsing during the early stages of the pandemic, according to Canfax Research Services. “With stronger cash prices, increased slaughter and larger fed cattle/cow exports, this week’s market
tone was slightly bullish,” Canfax said in a June 5 weekly market report. Canada’s beef exports are also strong, especially to Japan, Laycraft added. Year-to-date exports were up eight per cent as of late May. Still, the pandemic has had a major financial impact on cattle producers, said Carson Callum, Manitoba Beef Producers' general manager. “There definitely were producers in the province who took a financial hit. There’s also producers having to hold on to their animals longer because of the backlog that was part of those plant closures,” Callum said. “Here in the province we could be feeling the impact for the next number of months or longer, based on the challenges with processing capacity.” A federal government announcement made May 5 seeks to lessen the financial burden on producers forced to retain animals on farms because of the plant slowdowns. Ottawa is pledging up to $125 million for livestock producers toward a set-aside initiative to help offset extra feeding costs for livestock backed up on farms. The cattle and hog sectors will each get $50 million while the remaining $25 million is still undefined. Funding will flow through the federal-provincial Agri-Recovery program. The program is cost-shared 60-40 between Ottawa and the provinces. Ottawa says its share will be paid whether or not provinces participate with their share. As of June 22, Alberta, Saskatchewan and Ontario had agreed to do so. In a June 9 interview with Cattle Country, Manitoba Agriculture and Resource Development Minister Blaine Pedersen said the province expects to receive $8.5 million of the $50 million share for cattle produc-
ers. He said Manitoba was negotiating with Ottawa on how to contribute its 40 per cent share. If Manitoba decided to do so, it would add another $2.5 million to $3 million. “It never is enough. It never covers everything. But it’ll at least help producers keep operating,” Pedersen said. Meanwhile, cattle producers are lobbying federal and provincial governments to improve business risk management (BRM) programs because of COVID-19 fallout. Laycraft said an industry review of AgriStability is underway. It’s expected one of the recommended changes will be to remove the program’s reference margin limit, which limits payouts to farmers. Producers often say the program does not work for them. As a result, only about a third of all farmers are currently enrolled in AgriStability. The figure is even lower for cattle producers. Another concern is the Western Livestock Price Insurance Program, which saw premiums for forward price coverage skyrocket when COVID broke out. Many producers feel premiums are often too high and coverage too low for the program to be worthwhile. MBP had asked the federal and provincial governments to this year cost share the price insurance premiums with producers, similar to what is done with crop insurance, but governments did not act on this request. Pedersen said his province is trying to improve some of its own programs to benefit producers. A report on ways to improve crop insurance coverage for forages is expected soon. The province is also considering changes to hunting regulations for bears and wolves.
President's Column
Young beef producers and COVID-19
Market Report
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BY RON FRIESEN