Feedlot operators are expressing optimism that the latest government assistance program will provide a financial boost to help keep them afloat.
Southern Alberta feedlot operator Rick Paskal sold cattle through the auction market last week and received between 45.75 and 50 cents a pound, about 10 cents higher than what the three main packing plants were offering.
“I was really pleased,” he said. “This new program lets speculators into the marketplace to bid on our cattle.”
He sold another 3,000 head through a satellite auction from Vold Jones Vold in Ponoka, Alta., on Aug. 1.
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Blair Vold said fat cattle ranged from 45 to 52 cents a lb. with 52.50 as the high price.
“It’s the highest price it’s been in a while,” said Vold. He estimated about half the 8,000 fat cattle stayed in Canada. The other 4,000 were sold to American speculators.
If producers can get around 50 cents from the marketplace, the federal and provincial bovine spongiform encephalopathy program will pay another roughly 40 cents a lb. for a total of 90 to 92 cents a lb. It’s still less than the $1.05 cattle were selling for before the U.S. border was closed, but it is a significant cut in losses.
If producers get 35 cents from the market they will only get another 35 cents from the BSE program, less than what they need to cover costs.
“If we continue to get that, we’re out of business,” said Paskal.
“The banks are still working with me.”
Alberta Agriculture said that as of July 31, 47 producers had preregistered for the program to set aside 15,051 head. An additional 1,554 head were set aside through 22 auction markets during the first four days of the program. A maximum 100,000 fat cattle can be set aside under the program, which is expected to last three to four weeks.
Saskatchewan Agriculture officials said they have plenty of interest and inquiries for a similar program in that province, but no applications have been received. They estimate about 10,000 fat cattle will be set aside in the program.
Bob Perlich of Perlich Brothers Auction Market in Lethbridge said there were several people at a July 31 auction feeling out the new Fed Cattle Competitive Bid program that allows investors or producers to buy fat cattle, receive payment, and hold them out of the slaughter house for at least eight weeks.
“This will help commerce,” said Perlich.
It was the first fat sale the auction market has held since the U.S. border was closed to Canadian beef following the May 20 discovery of BSE in an Alberta cow.
Steve Primrose of Primrose Livestock in Lethbridge jumped at the chance to sign up for the program.
He estimates he’s bought about 40 percent of the 2,000 to 3,000 fat cattle sold at three southern Alberta auctions during the first week of the program.
“It’s working 100 percent,” said Primrose, who said cattle at the auctions are selling for five to 10 cents higher than packing plants are offering.
Primrose isn’t counting on the border reopening soon, but he is gambling that in eight to 12 weeks the price of fat cattle will jump because of an anticipated shortage at the packers and he will be able to sell at a profit.
“I’ve seen some people kind of smile. They can see a little ray of light,” he said.
Part of that light is a comment from federal minister of agriculture Lyle Vanclief July 31 to industry officials that he believes the American border will be open by the beginning of September.
“I’m optimistic that the United States and Japan will work out some arrangement,” said Vanclief
“We know that Japan has said to the United States that as of the first of September they want some sort of a process to assure the Japanese that there’s no Canadian beef and beef going from the United States to Japan…. So I’m confident that once they make that arrangement, then the United States will start to open the Canadian borders because the Americans have said very clearly to us and publicly that Canadian beef is safe.”
Alberta Cattle Feeder Association director Jeff Warrach said he’s pleased with Vanclief’s news, but he’s not taking it as gospel.
“That’s positive, but we’ve heard that before,” said Warrach.
