Cattle producers doing what they can in wake of hot, dry summer
The long-lasting drought conditions across the southern prairies have many cattle producers looking at their best options as feed supplies dwindle and colder months approaching.
Native grasses in pastures have gone dormant due to the hot temperatures and lack of moisture, a situation similar to last August.
The differences between the drought last year and the one this year have been the levels of sub-soil moisture last summer and the long, cold winter and spring earlier this year.
Rick Toney, from Gull Lake, is chair of the Saskatchewan Cattlemen's Association and said his area is drier than other regions of the province and feed is in short supply for many producers.
"We were lucky last year because there was precipitation in the fall and we had lots of sub-soil moisture. This spring was long and cold and it depleted the feed supplies. Some guys had a lot less feed supply from the drought from last year," said Toney, adding that hay supplies are one-third to onehalf of normal. "The hay we have here is good, but there is a lack of it."
The long, cold winter and spring forced longer feeding periods, exhausting feed supplies for many. Couple that with the hot, dry summer that caused the native grasses to go dormant early and forced other sources of nourishment to be found.
"Can we get feed out of the north? Can we take our cattle up north? Which would be cheaper? Guys are asking those questions," said Toney.
"People with irrigation might have some hay to sell. People are silaging and baling up crops for feed and any place where hail hit, they'll be making feed out of it. The tonnage is way down for silage. Looking at the cobs, I'm not sure what we'll get out of it. There's not a lot there and the height is down, too," he added.
Reducing the herd size is another option some producers have already been exercising, starting with the selling of yearlings even though they are not yet at their optimal weight.
"Guys are culling. They're selling their yearlings early. The pounds are down, so it is hitting their income seriously and the pounds are down because of the early market and because of poor grazing," he said.
Toney said that because prices are decent, the yearlings have been selling in Saskatchewan.
"It's good there was a bit of an upswing in the market," said Toney, who is doing some culling at his own operation.
"We're looking at all sorts of things. At home here, we are culling heavy. Guys are asking, 'how soon can sale proceeds to the following year.
To qualify for the program, the herd must be reduced by at least 15 percent. If 15-30 percent of the herd has been sold, 30 percent of the income from net sales can be deferred. If 30 percent or more of the breeding herd has been reduced, 90 percent of the income from net sales can be deferred.
Should there be consecutive years of drought or excess moisture or flooding, producers can defer sales to the first year the region is no longer considered to be a prescribed region.
Saskatchewan has taken the lead in lobbying the federal government in ensuring the livestock tax deferral program can be delivered in a timely fashion so producers can make necessary, immediate decisions.
"In Saskatchewan, we've asked for a tax deferral from our government and we've sent a request to the federal government, too. (Recently) at the Canadian Cattlemen's AGM, we had representatives at the domestic Ag. meeting and asked for an income deferral for weather conditions," said Toney. "We want it to be timely and it has to be triggered by the producer. People need to know today what their options are, not six months from now."
The proposal garnered support from cattle producers across the country.
"There were reps from every province at the domestic Ag. meeting and it passed unanimously. The next day at the board meeting, it passed there, so the entire cattle industry across the country is in favour of it," said Toney.
"Our commodity can not be stored like grain. You can't just take it off the field and put it in the bin. We have a perishable product and the tax deferral helps people get through the hard times. If you have to sell a big portion of your herd and then get taxed, you don't have that money you need to buy back next spring. This is very essential for the industry."
Maintaining a solid cattle herd in Canada, one that has the opportunity to grow and thrive is important not only for the producer, but for the feedlots, packers, and other beef industry businesses.
"In Canada, you want to keep the cow herd where it's at or grow it. We need those calves to keep the feedlots going. So, we need to keep our cow herds," said Toney. "If the packers can't keep their lines going, people get laid off. It impacts the entire chain and it impacts the Canadian economy. This tax deferral will keep money with the producers. The drought is a mitigating threat and every spin-off industry will be affected. "We're a big percentage of the Canadian economy. Alberta is the largest cattle producer and Saskatchewan is second. This thing has been mushrooming."