Cattle production has never been more profitable, and yet the latest statistics show Canada’s beef breeding herd continues to decline.
Other profitable opportunities within agriculture are also being by-passed.
Money is usually a big motivator, but other factors are also at play, including labour availability, lifestyle choices, lack of expertise and lack of investment capital.
Advocates of organic production point to good prices and a bright future, but production from Western Canada is failing to keep up with demand.
A burgeoning ethnic population in Canada has created new domestic demand for lamb and goat meat. Lamb has been an interesting opportunity for years, but breeding stock numbers have remained relatively stagnant.
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Bison production has also shown good profitability for an extended period of time, but it has struggled to attract new entrants.
Many of the berry crops we can grow in Western Canada, including saskatoon berries, sour cherries, sea buckthorn and haskap, have great nutritional characteristics and would appear to have a bright future.
Why aren’t growers rushing to these opportunities?
Of course, there’s never any guarantee on long-term profitability in any business, but even if profitability could be assured, there still wouldn’t be a stampede.
Just look at dairy production, which enjoys stable returns and good profitability for efficient producers. It’s prohibitively expensive to get into dairy farming because of quota and facility costs, but many have voluntarily left the industry. The number of dairy farms has declined dramatically over the past 20 years.
Lifestyle is one of the reasons many farms have switched from dairy to something else. For existing operations, robotic milkers will continue to be adopted because they reduce labour needs.
We would eventually expect beef cow numbers to begin rising. After years of decline, minor herd expansion is finally occurring in the United States. When expansion finally starts in Canada, it will no doubt come from existing players increasing herd sizes rather than brand new entrants.
Cattle may be profitable, but they’re a lot of work. There are aspects that just can’t be mechanized, and there’s more physical labour involved than with modern grain production.
Labour is also a deterrent in sheep and goat production, and it’s a big barrier for successful berry and vegetable production.
Branching into a new sector can be a steep learning curve.
Switching to organic requires new production and marketing skills as well as increased patience for paperwork. For those who haven’t been involved in cattle production recently, production techniques have changed dramatically.
Berries, lambs and goats require marketing acumen as well as production knowledge.
Relatively few non-farmers are going to jump into the industry because investment costs are high. Existing producers will tend to stick with what they know rather than chance something new.
Producers actively sought other options during the really tough times in the grain sector.
Bison were a growth industry, and many producers jumped into elk production, only to watch the loss of markets for elk antler velvet. Producers were desperate to find other ways to make a living in agriculture and they explored avenues that ranged from ostriches to ginseng.
The grain sector has enjoyed amazing returns in recent years. Even though returns have tightened, profitability hasn’t been squeezed enough to rekindle the desire to jump into some other sector of the industry. It would take a protracted grain sector downturn for that to change.
