ATHABASCA, Alta. – In the midst of dropping cattle prices and a steady supply of dreary agriculture news, Kelly Olson is still optimistic about agriculture and the beef industry.
The key to his optimism is having a varied farming business and knowing exactly what each of his diversified operations costs, said the northern Alberta farmer.
“Diversity is key to our operation,” said Olson, who grows oilseeds, grain and hay, as well as selling open and bred heifers from his almost 1,000-cow herd on a 10,000-acre farming operation.
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When the borders to 34 countries were closed to Canadian cattle May 20 after the discovery of a single case of bovine spongiform encephalopathy, Olson changed little in his cattle operation.
“We didn’t panic. We knew it was very serious, but it was not the end of the world,” said Olson who double checked his finances to see where his costs could be reduced.
One of the first decisions he made was to push back his calving dates from winter to May and June as a way to reduce labour costs.
“We find our labour inputs are substantially lower. We just don’t find it feasible to calve in the winter time.”
He also increased the number of cows that calve in the fall from 25 to 60 as a way to spread his cash flow throughout the year. While it costs more to calve in the fall, higher calf markets outweigh those costs in the following year.
He had thought about pushing back the calving season for a while but the BSE crisis was the push needed to make the move.
“You need a shock to the economic system to get you to change your costs,” said Olson.
“We’re really a lot better at it when times are tough than when times are good.”
A group of calves ready to go to the feedlot was put out on grass instead. They’ve since gone into the feedlot and should be ready to slaughter in November, when Olson anticipates there may be a shortage of fat cattle and possibly a jump in slaughter cattle prices.
“We kind of think there might be a hole in the market then,” said Olson, who tracks market prices throughout the year.
Despite the low prices for slaughter cows, Olson still plans to sell any open or infertile cows from his herd. He doesn’t like taking a financial hit on the slaughter cows, but because he has a diversity of income, it is a loss he said he can withstand.
