Fall Calf Decisions

[charliep]

Have a project around potential impact BSE/border closure on calf decisions this fall and from there feed grain consumption?

Assumptions: 500/600 weight calves - 50 to 75 cents/lb, feed barley (central Alta. - $1.75 to $2/bu).

Unknown: Will the border with the US be open for animals under 24 months before this fall?

What will the cow calf operator do this fall? More backgrounding by cow calf operators? Potentially more heifer retention for breeding? Cash flow? Super NISA payment? Tax bill in current tax year as a result of the tax deferal program of the past two years to allow partial liquidation of the cow herd (can't remember name)?

[Smithy]

Good questions Charlie.
I know that if the border is still closed this fall and calf prices are way down, we will keep all of our heifer calves and as many of our steer calves as we can.

[15444]

I think this is a question on all cow/calf producer's minds. Hopefully I'll have enough hay to keep everything. Although I will butcher a couple of steers I had kept for meat this fall plus two poorer fall calves from last year for hamburger. The freezer will be mighty full this winter!

[rsomer]

I agree that the US border situation is an unknown at this time and that is of course the most crucial factor. Given that, I question any assumption at this time about the price of weaned calves. Price of barley sounds reasonable. I would add that forage supplies, at least in our area, look good. The only way to get cash out of that pile of silage is someone has to feed it to a calf so that should lend support. I believe our politicians have indicated further support to producers if the border is not opened soon, certainly before the fall run of calves begins. Cash flow needs could well be met by low interest government loans to producers who opt for backgrounding their calves. I don’t see how NISA will offer significant help to Alberta’s beef producers as beef has only been part of NISA since 2001, limiting the amount of potential contributions into the NISA fund. I understand the federal government is no longer insisting federal payments must be funneled through a NISA account. The cow herd will not be liquidated as prices will be too low and feed supplies will be ample. Unless there is a further tax deferral many producers will have to purchase cows to avoid tax from cows sold in the drought of 2002, again lending support to the bred cow market. On our farm, we typically have backgrounded our calved into March and will certainly do so again. Up to about 15 years ago we finished our steers and sold direct to the packer but quit because the packers were just too hard to deal with as we were a small feedlot and couldn’t put together loads like the packers wanted. I don’t believe the packers are going to be any easier to deal with next summer. Basic strategy will be to try and retain ownership of animals until the border has sorted itself out. I see this happening shortly after our present Prime Minister steps down in favour of his replacement, between November 2003 and February 2004. Failing an improvement in the border situation by then we might consider finishing the calves in a custom lot but it is too soon to make that decision now.

[gallard]

Charlie: In this area of Central Alberta decisions are going to be delayed as long as possible. Even if the boarder opens tomorrow, the feeling in livestock circles is that it will not be wide open. As a result there will be limited grain fed until the picture clears as to marketability of back-grounded steers/calves. Most producers plan on keeping their calves with the large quantity of feed available. However we have only had 4" of rain since May 1 and with no sub-soil moisture our pasture is ripening off and we may be forced to act sooner than we anticipated 2 weeks ago.

[dalek]

Heard a presentation by OCA today. They don't seem optimistic now about the border opening before late fall or early winter. Also, the thinking now is that when the US opens the border it will be staggered, opening for fat cattle first, then calves, and cull cows last, with a lot of Americans with deep pockets coming north trying to buy up all the calves at prices Canadian feedlots can't afford.
However, there's a growing perception in Ontario that with US prices up and the formula based on US prices, many feedlot operators will actually be getting MORE money than they would have without BSE while breeders and backgrounders get nothing.
Also, how is certification that cattle will be slaughtered within 14 days being handled in the west? Initially the idea in Ontario was that it would all be up to the farmer to track down the buyer for certification, but now OMAF is giving sales barns the option to certify entire sales or parts of sales as slaughter sales.

[ALICIA]

I was just thinking the same thing what am I going to do with my steer calves. I was looking them over yesterday and I see some are around 550 lbs. I usely sell about August 25th or so and I'm decided to do the same again, regardles of the price, because I don't want to be bothered all winter with them and I
just do not see the price going up if every one keeps their calf, hoppen the boarder will open up. May be the goverment will reinbuse me for the loose and I will not have expences in feed etc. Its the cull cows I'm worryed about. Ones 15yrs old and I really didn't want to calve her out again. But she is in calf for January again and If I have to I have to. I mean if she dies giving birth no great loose she's not worth anything right now any way.

[ianben]

Sounds like a mighty big pile of beef stacking up to me.
3/6 months unexported beef is going to weigh on prices for a long time.
Those Yanks have managed without your beef that demand has gone.
Stacking it up, feeding it longer, calving again just makes things worse. Beef is a long cycle which is hard to adjust to BSE type events but realise the problem and the solution should be less painful.

[Braveheart]

CharlieP: I farm in Manitoba, where normally calves went west, and the barley followed them. This year most of my cow/calf friends and neighbors are going to background or finish the calves. Barley prices are low and going lower and putting barley through calves retained on the farm will be hoped to add value.

We see the U.S. and Canadian markets not separate, but as an integrated North American market. Processors in the Midwest are likely already feeling the effects of the closed border. By the time the '03 calves are fat we're all hoping some recovery will have taken place. We're also being driven to this decision by the Gov't program which requires calves sold for slaughter to qualify.

Cashflow is a concern here. Cull cows are a major problem for anyone that has any. NISA will not help anyone in time.