The Alberta government will launch a bid system to identify which cattle should be processed, helping address massive bottlenecks caused by the COVID-19 pandemic.
There are no timelines yet on when the system will be in place, but it’s part of the government’s staged approach in helping producers weather impacts caused by the crisis, said Agriculture minister Devin Dreeshen.
Before the system is in place, Dreeshen said, the government will be providing roughly $2 per head per day for eligible fed cattle via AgriRecovery.
It’s part of the set-aside program that was launched by Ottawa in partnership with the provinces earlier this month. Alberta fed-cattle producers enrolled in the program are expected to receive $43 million, with $17 million coming from Alberta and $26 million from Ottawa.
Dreeshen said the $2-per-head program will cost roughly $12 million.
The remaining dollars will be spent on the second phase, which includes the bid system. Dreeshen anticipates average bids will work out to be $2 per head per day. Daily feed costs are around that figure, he said.
He explained that once the system is in place, bids will be up for 48 hours every week.
“It helps select the type of cattle that will be processed as we start to dig into the 100,000 plus in bottleneck,” he said. “It’s the cleanest design, reduces costs and makes sure the right cattle are moving and going to slaughter.”
He said feedlots will be submitting the bids, deciding which cattle go to the next stage.
Dreeshen said the process with be managed by an advisory committee and administered through Agriculture Financial Services Corporation (AFSC).
Members of AFSC, Alberta Agriculture and industry groups will sit on the advisory committee.
Dreeshen said the system will work similarly to the one during BSE, but will be tweaked to avoid previous mistakes.
He said there were lessons learned around the weighing of cattle in the BSE bid system.
As well, he added, the open U.S. border should make things easier.
“They (the U.S.) have had some shutdowns and slowdowns of their beef processing plants, but they, like us, are starting to turn that corner,” Dreeshen said.
He said industry is supportive and understands the system needs to be set up correctly.
Dreeshen said the government will re-evaluate the program to see whether calf producers could benefit. It will depend on what the market and supply chain looks like in the fall, he said.
He noted calf prices have rebounded slightly.
As well, he said the government is working to fix the Western Livestock Price Insurance Program.
Many producers haven’t been buying into the program largely because of high premiums.
Dreeshen said a future cattle insurance program would need premiums to be affordable for them to make sense.
“The price of the premiums are so high, it doesn’t pencil out for ranchers to utilize,” he said. “That is why we want to make improvements to it. Crop insurance is fantastic, bankable and predictable. There is a lot of buy-in and subscription from farmers. We need to mirror that on the ranch side.”