Decline in sales, prices worries cattle producers
Cattle farmer Bridget Andrews called the recent drop in the livestock industry a “devastating blow to the bottom line” for farmers across Saskatchewan.
The Farm Income report for 2016 released by Statistics Canada says the industry suffered a 17.7 per cent decrease in cattle and calf sales across the country — the first drop in that category since 2009.
The down year was also marked by a 21.8 per cent decrease in cattle prices in Canada, which contributed to a 7.2 per cent loss of revenue, according to the report.
“When prices drop like they did last year, it makes you a little scared,” Andrews said. “You don’t want to go backwards.”
A co-owner of Triple A Herefords near Moose Jaw, Andrews noted the sudden decreases might not have been a surprise, but it is still cause for worry. She said memories of the mad cow disease scare that devastated the Canadian cattle industry are never far off, and farmers used the record years in 2014 and 2015 to continue to recoup their losses.
Regardless of any good or bad changes to the market, the operation has to continue.
“The cows still have to be fed, rent still has to be paid ... unless you sell your herd off, you can’t just throw in the towel,” Andrews said.
According to Statistics Canada’s Census of Agriculture, many farmers have chosen to leave the business. The number of cattle farmers in Canada dropped by more than 12 per cent since 2011; the census suggests farmers chose to sell their herds in 2015 to take advantage of record prices.
“The market really did dive last year,” Saskatchewan Cattleman’s Association CEO Ryder Lee said. “The drop was far and fast over the course of 2016, and that took a lot of buns out of the business.”
Santosh Poudel, a farm income analyst for the province’s Ministry of Agriculture, cited an increase in American cattle production as the main cause of the falling market.
“The U.S. is one of our major markets, and they have a huge domestic supply there,” Poudel said, adding that it could take “a few years” for the market to return to a more normal level.
Both Poudel and Sidney Friesen, manager of economics and farm income policy for the ministry, said there isn’t much cause for concern in the Saskatchewan economy, where crop farming accounts for the bulk of the agriculture industry. Poudel said losses in the livestock industry will be “balanced” by the increases in crop farming revenues.
With cattle prices once again starting to trend upward in early 2017, Andrews said she feels positive about the industry’s future, even if it doesn’t return to the record heights of 2015.
“As agriculture producers, we have to be eternal optimists to do what we do,” she said.