Auctioneer Darren Lutz calls out the bids at the Medicine Hat Feeding Co.
added customer service such as feeding cattle before auctions in the 76 pens set aside for that purpose, full tagging and export ready certification for the majority of animals sold, and pre-sort selling.
“We’re doing pre-sort sales now. So we’re mixing your cattle with my cattle and your neighbours’ cattle together and selling them in bigger lots. And that is probably the most significant change, rather than selling them individually as we have done in the past. We are organizing larger sales now, and that brings in a larger number of buyers; and they can come look at three to five thousand cattle in four hours,” Taylor says.
MacLean agrees that in today’s cattle business “loyalty” is no longer something cattle auctions and other local cattle service providers can rely on to grow. He says what matters most to producers now is price and convenience. But what should matter even more, argues MacLean, is understanding beef consumers’ needs and adjusting accordingly.
“Loyalty. I don’t get personally in a knot about it because it’s a fact of the economy right now,” says MacLean. “As we go along the consolidation of the industry is changing the way that the product gets marketed because of bigger corporations like the Costcos and the Wal-Marts and the McDonalds — they have a huge influence either through animal welfare and all these types of things, and rightly so. But sometimes they don’t always understand what the true issue is (for producers).”
For Taylor the “true issue” for the cattle business in southeast Alberta is etched on his customers’ faces.
“If you look at the people who come and collect cheques here there’s very few young people,” Taylor explains. “Young people here are 50. And it’s been very hard for the family ranch to support multi-generations because now when Dad retires it’s expensive for him to live in town. He can’t afford to turn the ranch over, and he can get millions for it. And the younger generation can never pay for it without having a job off the ranch.”
Down in the ring at the Medicine Hat Feeding Co. most of the cattle going through are older animals beyond their best calving years, and there isn’t a lot of interest from the buyers. The auctioneer calls out the bids, and the sellers watching converse together quietly in the mostly empty seating area. The gate opens and a young Black Angus bull comes sweeping into the arena, snorting, head uplifted, full of energy. The young bull draws the highest bid of any animal seen so far. Every buyer present is looking for youth, and hopes to find it. It’s the same all over for an aging cattle industry. ■
Cattle producers finding stability in market prices
By TIM KALINOWSKI
The general outlook for cattle producers in southeast Alberta is positive heading into 2013. Cattle prices have been fairly stable the last two years, and, according to local analysts, that trend should continue. Lyle Taylor of the Medicine Hat Feeding Co. says that southeast producers are generally happy with cattle prices right now even though there was a slight decrease in 2012 from 2011.
“Cows brought 2.5 per cent to 5 per cent less in 2012 than 2011,” Taylor explains. “2011 was a record year. And if you looked at $900 a head then, in 2012 5 per cent less was $855. So that didn't quite meet producers’ expectations, but it was still a good price. It's always hard to take less than last year because your expenses don't decrease, but overall the producer was very well satisfied at the state where the cattle market is.”
Major concerns for southeast Alberta cattle producers are the rising costs of feed and transportation. It's fine while the cattle prices remain high, says Chuck MacLean of Porter-MacLean Livestock Management Inc., but producers need to continue to be cautious and forward thinking in their planning to best take advantage of the currently favourable market conditions.
“We've got a lot of challenges,” states MacLean. “Cost of production is high. We are getting some of the all-time record prices. That's what makes the news, but what you don't see is the (increasing) costs of production: Whether that's labour, or whether it's feed costs, whether it's transportation. There are so many things that actually affect your net. The gross (in the cattle industry) looks fabulous right now, but the net gets to be a little bit of an optical illusion.”
MacLean says those producers who manage their costs and risks well should continue to see decent profits as cattle inventories show no sign of stopping their decline in the United States.
“We've hit a 50 year low in the United States. So I look favourably on the primary producer side because people will be making money because they stayed in and they deserve it,” says MacLean.
One of the biggest local concerns southeast Alberta cattle producers faced in 2012 was the ongoing problems with the Lakeside packing plant in Brooks, Alta. This created a lot of uncertainty amongst cattle producers, but Lyle Taylor says it did not have as strong an impact on local producers as it might have done.
“What happened of course with the Lakeside dilemma is it created a great deal of uncertainty,” explains Taylor. “It didn't affect the calf market as much as it did the fed cattle market. That (fed cattle) market lost $50 a head where the calf market was probably at the peak of where it was going to be regardless of what happened at Lakeside.”
Wayne Bowyer of Cowtown Livestock Exchange in
Maple Creek, Sask. says that, even given these kinds of concerns, the feeling among the local producers is one of cautious optimism as they enter the 2013 calving season.
“It's a little easier to do business right now because people are in better spirits when you hand them their cheque at the end of the day. It has definitely been better for everybody the last couple of years, for sure. I think there's cautious optimism (for 2013),” states Bowyer.
MacLean says current conditions should pave the way for the eventual expansion of herd sizes in Alberta. He explains that producers who want to stay in long term should seriously be considering making a move in that direction when they feel the timing is right for their own operations. Prices are good and, speaking as Chairman for Canada Beef Inc., MacLean says that a strong market demand is there as well.
“(At Canada Beef Inc.) we see a great opportunity for primary producers to expand their herds,” says MacLean. “But having said that, we also understand that in the U.S., until the drought situation has corrected itself in some form, expansion is difficult.”
Southern Alberta auction volumes (last half of 2012) Source: Canfax
For the week ending Volumes (# of head)
2012-6-01 ......................................... 3,234 2012-6-08 ......................................... 4,700 2012-6-15 ......................................... 3,809 2012-6-22 ......................................... 2,865 2012-6-29 ......................................... 3,258 2012-7-06 ......................................... 2,415 2012-7-13 ......................................... 3,462 2012-7-20 ......................................... 1,927 2012-7-27 ......................................... 2,226 2012-8-03 ......................................... 2,212 2012-8-10 ......................................... 1,760 2012-8-17 ......................................... 1,801 2012-8-24 ......................................... 3,647 2012-8-31 ......................................... 5,626 2012-9-07 ......................................... 4,332 2012-9-14 ......................................... 9,123 2012-9-21 ......................................... 4,926 2012-9-28 ......................................... 6,436 2012-10-05 ....................................... 4,936 2012-10-12 ....................................... 7,948 2012-10-19 ....................................... 18,668 2012-10-26 ....................................... 20,168 2012-11-02 ....................................... 27,899 2012-11-09 ....................................... 33,158 2012-11-16 ....................................... 16,635 2012-11-23 ....................................... 23,480 2012-11-30 ....................................... 15,076 2012-12-07 ....................................... 17,458 2012-12-14 ....................................... 9,671 2012-12-21 ....................................... 5,380 2012-12-28 .......................................931
OUR COMMUNITIES ■ OUR REGION ■ OUR PEOPLE | 21
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