Manitoba’s feedlot industry could collapse unless the government does more to level the playing field with Alberta feedlots, predicts a prominent auctioneer in southwestern Manitoba.
Rick Wright, manager of Heartland Livestock Services in Brandon, said Manitoba feedlots cannot continue to compete against those in Alberta that put cattle on a set-aside program, guaranteeing a price basis and price protection when the animals are sold.
“Our feedlot base is eroding like crazy,” said Wright, who represents a large group of investors who feed cattle.
“This is the first time in a long time at this time of year that we have empty pens in our feedlots.”
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In the May issue of Cattle Country, a publication of the Manitoba Cattle Producers Association, Wright wrote a column describing how cattle feeders in Alberta want to sell their finished cattle as soon as the set-aside program expires on them. He said there have been times when the program cattle in Alberta were sold below the daily cash value to ensure they went to slaughter immediately.
On top of that, it can cost as much as five cents per pound live to ship finished cattle from Manitoba to Alberta. Because of the added freight cost and the Alberta program, Manitoba feeders are at a disadvantage, Wright said.
“The problem we run into is that cattle coming off the set-aside in Alberta are being gobbled up by the packers there at less than market price.”
Wright said before confirmation of BSE in an Alberta cull cow two years ago, Manitoba was steadily building its feedlot industry with the hope that one day the province could attract a larger packer. Manitoba agriculture minister Rosann Wowchuk was also promoting livestock expansion, and had indicated an interest in one day enticing a major cattle packer to the province.
However, Wright said all of those efforts will be in vain if something is not done soon to level the playing field between provinces.
“Rosann is telling everybody that we need more killing capacity in Manitoba. At the rate that it’s going, we won’t need it because there’s going to be nobody left finishing cattle here.”
Manitoba once had a robust cattle slaughter industry, but that shifted to Alberta, leaving Manitoba producers heavily reliant on either shipping cattle into the United States or selling them to buyers in Saskatchewan and Alberta. With the U.S. border closed to Canadian live cattle, Manitoba producers are even more dependent on the Alberta market.
“We worked really, really hard to develop Manitoba as a good place to feed cattle,” Wright said. “Right now we are not a good place to finish cattle.
“There have to be programs that are fair and equitable for all the provinces. Alberta can’t continue to buy the business and that’s what they’re doing. They bought the packing plants to go in there and they’re buying the feeding business right now.”
If more of the feeding industry shifts west, a lot of business will go with it, Wright said, noting that cattle finishing creates direct jobs, as well as demand for feed, trucking and veterinarian services.
“The spinoff of this business is being overlooked a lot.”
Wowchuk said the advantage Alberta has over Manitoba is frustrating, and the province has expressed its disapproval. However, she said the Manitoba government is not considering trying to match Alberta’s support for cattle finishers.
“We had a program that was designed with the industry, with the provinces and the federal government. As soon as we had the program, Alberta stepped outside the box, and that’s very difficult for other provinces.
“The best thing to me would be for Alberta to drop their top-up and come in line with the other provinces, which was the intent of the program.
“I’m afraid we can’t compete with the oil wells of Alberta. We have to look at what kind of programs we can put in place in here. We are focusing on increasing our slaughter capacity in this province and will continue to work in that area.”
Larry Schweitzer, president of the Manitoba Cattle Producers Association, agreed feedlot owners in Manitoba are more reluctant to buy cattle to put on feed because of the circumstances described by Wright, but he said the feedlot industry is not yet on its last legs.
There are again hopes the border will reopen this year, and if the slaughter industry in Manitoba can be expanded, the prospects for the province’s feedlots could brighten, said Schweitzer, a partner in a feedlot at Hamiota, Man. One of Manitoba’s advantages is its supply of affordable feed grains, he said.
Some feedlots in Manitoba are running close to capacity. However, many of the cattle are owned and are being custom fed for investors from Alberta and the United States, said Schweitzer. The U.S. investment is driven by people who believe the border will reopen to exports of Canadian live cattle this year.
Schweitzer said there has been at least one upside to the additional support enjoyed by feedlots in Alberta and Quebec. They have helped maintain demand and prices for calves to put on feed, which has been a benefit to Manitoba’s cow-calf producers.
