An analysis of the province’s cow-calf sector done for the Agricultural Producers Association of Saskatchewan suggests the growth of the last 20 years is at risk unless new policies are developed.
President Glenn Blakley said 40 percent of the industry could be lost without some sort of government intervention that doesn’t result in countervail action.
Calf prices have dropped substantially even since a post-BSE recovery. The report by Rocky Lake Management said a cow-calf producer with 200 cows has seen revenue decline $63,000 since 2000, or $38,500 since 2005.
The rapid appreciation of the Canadian dollar against the American currency lowered steer prices by $12 per hundredweight compared to last year.
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Record high feed grain prices are affecting producers’ ability to pay for it. And, the U.S. country-of-origin labelling law that comes into effect Oct. 1, will also affect prices.
The executive summary of the paper, scheduled for release June 18 at the Western Canada Farm Progress Show, said the impact of COOL will be similar to that of BSE.
All together, the three factors have affected the basis between U.S. and Canadian feeder calf prices, moving it from a historical basis of minus 71 cents to the current $20.71 per cwt., said the paper.
Meanwhile, the Saskatchewan cow herd sits at 1.48 million cows, nearly double the 1986 number. Pasture acreage increased to 4.8 million acres, up from 2.2 million acres in 1976.
“With grain prices at historical highs, combined with losses in the cow-calf sector, it is expected that without policy intervention, cow numbers will decline, along with a reduction in grassland acres,” said the paper.
“It is not unrealistic to expect cow numbers to decline to the mid-1980s level of 700,000 head with a potential loss in grassland of two million acres.”
The paper proposes five possible policy options that could prevent that situation.
They include: a grass protection payment of $30 per acre; changes to business risk management programs; rolling back community pasture rates; opposing COOL; and reviewing regulatory costs associated with BSE.
Blakley said those regulatory costs total $100 per slaughter animal.
“That puts us at a significant disadvantage,” he said.
APAS will take the paper out to district meetings over the next month to discuss the options and fine-tune them.
