The two largest Alberta packing plants are buying fat cattle from Manitoba and Ontario, which may be keeping fat cattle prices down.
Len Gamble, owner of Brussels Livestock in Ontario, said he knows at least 2,000 to 3,000 head of fat cattle were sold to Alberta packers at the end of October.
“They’ve moved a lot of cattle in the last couple weeks,” said Gamble, who thinks the packers might have been taking advantage of the unusually low Ontario cattle prices.
At the end of October, prices in Ontario were $1.40 to $1.42 dressed weight compared to Alberta’s $1.50 dressed weight prices.
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A week later prices were almost reversed, with Ontario fat cattle selling at $1.55 and Alberta at $1.42. Now that the prices are reversed, Gamble expects a reduction in Ontario fat cattle shipments.
Bill Jamieson with JGL Livestock in Moose Jaw, Sask., said he’s heard of cattle coming to Alberta from Ontario, but doesn’t know if packers are taking advantage of a temporary drop in Ontario prices, or if packers were purposefully buying those cattle to bring prices down.
If the packers were taking advantage of low prices that’s normal market practice, he said.
“If that’s not what happened and they were just bringing numbers out here to suppress the Alberta market, that’s not normal practice.”
Rick Wright with Heartland Livestock in Brandon hasn’t noticed a big jump in fat cattle going west.
“I wouldn’t say it was real obvious here.”
Manitoba cattle producers are current. Fat cattle are being shipped out as soon as possible, he said.
John Knapp, director of the rural services division with Alberta Agriculture, said he too has heard feedlot complaints against packers, but he is careful about laying blame.
“Without passing judgment, there has been some situational opportunism here.”
Knapp said his own read on the situation is that when the U.S. border closed to Canadian cattle in the wake of the discovery of bovine spongiform encephalopathy in Alberta, packers were losing huge amounts of money. They were forced to sell meat for half what they paid for it and to discard parts of the animal they could normally sell. On the flip side, when prices dropped dramatically and they were only offering 35 or 40 cents a pound, they started to make money
“I’m trying not to judge either party in this. I certainly appreciate what the feedlot sector says about packers maybe were able to profit from the situation in the later going.”
Robert Meijer, director of public affairs with Cargill Foods in Winnipeg said his company hasn’t bought cattle from Ontario, but looks to the three prairie provinces for animals for its High River, Alta., plant.
“We continue to buy our cattle across the Prairies,” said Meijer, who said Cargill is working with Manitoba feedlots to produce cattle that meet its specific requirements of having animals finished on a Vitamin E ration.
Rick Paskal, a feedlot operator from Picture Butte, Alta., said he is more worried about getting the packing plants back to work at full capacity. When the U.S. border was closed May 20, plants scaled back production and laid off staff.
“We’ve got the plants here, we’ve got a wall of cattle out there. We need these packers to run these plants at full capacity. That’s the biggest issue,” said Paskal.
“I don’t care where they buy their cattle as long as they run their plants full.”
Meijer said the packers are struggling too with lower cattle slaughter numbers.
“We’ve been working really hard to get those numbers up,” said Meijer, who added that Cargill’s High River plant is killing up to 3,200 a day, which is still lower than its normal beef kill of 3,800 to 4,000 a day.
“We took on a lot of risk early and had meat sit in storage and sit in the freezer. With the partial opening of the U.S. border, we’ve been moving a lot of product, but there’s still a lot of product that needs to move and it backs up as far as our slaughter capacity.
“We just don’t want another bottleneck situation.”
