What’s holding back Saskatchewan’s cattle industry?
Two Albertans had no trouble coming up with an answer during a recent conference in Saskatoon.
They said the province’s land ownership law is the biggest culprit.
“That may be the greatest problem right now,” said Dennis Wobeser, a cattle producer from Lloydminster, Alta., who in partnership with his children recently set up a grass ranch near Debden, Sask.
Alberta’s livestock industry is looking for a place to expand and Saskatchewan, with vast expanses of cheap and productive land, is an obvious and ideal location.
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“The cost of land is significantly less here, and it will grow just as much grass,” he said. “This is the land of opportunity.”
But laws restricting the amount of farm or ranchland that can be owned by outsiders are making that difficult to achieve.
“The foreign ownership laws send a message that outside investors are not welcome,” said Wobeser, whose children have moved to Saskatchewan to run the ranch.
Under Saskatchewan’s Farm Security Act, Canadians who are non-residents of the province cannot own more than 320 acres of farmland. Non-Canadians are limited to 10 acres. The provincial government has said it is prepared to review the regulations if they could be shown to be a barrier to growth in the agricultural economy.
Brian Nilsson, co-chief executive officer of Nilsson Bros. Inc. of Edmonton, said a significant amount of capital investment is needed if the province’s cattle industry is to grow, and the land ownership law is preventing that from happening.
“This is a way to attract large amounts of capital to come in and build the big feedlots that need to be built,” he told the meeting, adding that a 25,000-head feedlot requires about 10,000 acres of land.
Nilsson Bros. owns more than 100,000 acres of ranchland and operates a wide array of businesses, including meat packing plants, auction markets, food processing facilities, livestock financing, commodity trading and insurance. The company recently purchased Heartland Livestock’s auction services from Saskatchewan Wheat Pool and Agricore for $32.9 million.
Nilsson acknowledged that allowing out-of-province money into the land market might drive up prices, but said the benefits outweigh the costs. Feedlots buy grain from farmers, buy equipment and services and employ local people.
“There’s increased prosperity,” he said. “The feeding industry is a big part of the success of a lot of small towns in Alberta.”
At one point during the discussion, Wobeser blamed the province’s land ownership law on “little old ladies” in Regina and Saskatoon who want to keep farmland available for their grandchildren. They haven’t noticed, he said, that most of those grandchildren no longer live in Saskatchewan.
Wobeser and Nilsson’s comments sparked several exchanges with members of the crowd of 350 attending the Re-inventing Agriculture conference, co-sponsored by Saskatchewan Agrivision Corp. and the Saskatoon Chamber of Commerce.
Some were supportive, like Wally Meili, a farmer and businessperson from Moose Jaw who said he has talked with people interested in investing in Saskatchewan agriculture.
“That act says ‘we don’t want you,’ ” he said, adding that getting rid of the act is crucial to spurring economic growth in the province.
But others defended the land ownership rules.
“We want to encourage local ownership and control of feedlots, so the wealth that is created is circulated locally,” said Bill Turner, a farmer from Cupar, Sask., and member of the Farm Land Security Board, which oversees the land ownership act.
The board is committed to helping value-added and processing ventures get established, he added.
Mel Annand, a Melfort, Sask., lawyer and agricultural law lecturer at the University of Saskatchewan, said the land ownership rules keep a lid on land prices. That allows farmers in the province to produce beef and other agricultural products at a lower cost than their Alberta counterparts.
“Limiting the price of farmland in Saskatchewan gives us a comparative advantage,” he said in an interview later.
Annand said the rules also keep farmland affordable for young farmers who are just getting started or looking to expand.
The Farm Land Security Board regularly grants exemptions to the acreage limits, he added. If a developer looking to set up a feedlot in Saskatchewan could demonstrate it would benefit the local economy, he said, there’s a good chance an exemption would be granted.
Nilsson told the conference that large feedlots feeding 5,000 or 10,000 head aren’t the only answer. A network of smaller outfits feeding 500 or 1,000 cattle is just an important.
He said there are bound to be downturns in the cattle industry, and in many ways the smaller outfits are better able to withstand tough times.
“That’s why I advocate the grassroots development of the feedlot industry.”
He said a combination of small and large operations will give the industry strength and stability for the long term.
