Price of calves need to double!

[The Don]

Sold this years calves. Prices were terrible.
Cost to produce per cow $1600
Sale price of calf $950
Income per cow -$650
For each 50 cow block you lose $32500
Futures prices show no improvement.
Some of the papers thought the prices were not too bad? They must not own any cows.
I can't afford to be in the cattle business at these prices!
American imports were up 70% over last year. The Government (s) don't seem to care if there is food security as in having a viable cattle herd. When the Americans decide to hang on to their cattle there won't be any Canadian cattle left.
I've heard all about the "wall of calves" and the other excuses they have come up with to not pay a fair price for cattle. The countryside is looking pretty empty now. When the cows that got sold to pay the bills this year clear the system the real crunch will hit. I think the big impact will be fall 2023. I will be out of the business by then. I don't want to throw more money away.
What do you think the Canadian Beef Industry plan is going forward?

[NoBS]

Yes, every program out there is all about helping you defer taxes until next year as you sell down your breeding stock, or, make a payment for feed after most of it has already been shipped south because the US drought programs kicked in sooner. Manitoba's plan on breeding herd retention is the right way to go. At least that way there is an industry to grow our economy into the years to come. However, once the cows are gone from Sask and Alberta, there won't be much of a need for packing plants in western Canada. Maybe less margin needs to be taken at the packer and retail levels so producers can stay afloat.

[CommonCents]

I agree that prices are too low relative to cost of production but $950 per calf? Good steer calves weighing 600 to 700 lb. brought $1,300 +. Heifer calves $300 less. I would be interested in knowing what weight and sex you sold that only brought $950.

[The Don]

Can you explain the Manitoba plan?

[The Don]

Calves were a mix in weight averaged around 500 pounds. Prices were all over the place.
The cattle are Red and black angus with Simmental in the line.
I wasn't going to buy expensive feed to background the calves. I did that last year, fed them expensive feed through the winter and sold them for about the same money that I could have in the fall.
I know it takes good feed to get a calf that will bring the money. Poor quality feed will give gutty calves that nobody wants to pay for. I didn't want to do put more money out this year. I'm trying to keep some cows.

[woodland]

The Don…………
How did you arrive at the $1600 to raise a calf?

Quick math here……..
$200 for cow “depreciation”
$50 for breeding
$25 for vet
$300 for pasture (150 days @$2/day)
$645 for feed (215 days @$3/day)

$1220. And that’s high because of feed “inflation” this year

I agree that prices stink and to keep finding ways to grind costs lower isn’t much fun or sexy but necessary. Too bad feed grains are in the stratosphere as it would be half the cost to winter a cow otherwise.

There’s always a better way🍀

[The Don]

To give a benchmark I used the 2021 Manitoba Department of Agriculture number for 150 cows $1615.75 and rounded down.
Everyone will have a different number for cost of production.
Just a glance at your numbers. You have not included any equipment or facility costs, fuel, transportation... I didn't want to go through a discussion of what the number is or could be so I used a published one.

[NoBS]

Details announced for livestock breeding herd restoration funding

The Herd Management Drought Assistance program will be Manitoba’s third program launched under AgriRecovery

Alexis Stockford By Alexis Stockford
Reporter
Reading Time: 4 minutes
Published: December 13, 2021
Livestock, News
Cattle search for grazing on one of the Interlake’s sparse pastures in July.
Cattle search for grazing on one of the Interlake’s sparse pastures in July. Photo: Kristen Stocki
Application packages will soon be on offer for a third livestock AgriRecovery program — this one targeted towards replacing breeding stock farmers were forced to cull this year.

On Nov. 30, the province unveiled details of promised funding to rebuild those herds sucker-punched by drought. The new Herd Management Drought Assistance program will help fund the replacement of lost breeding females and will apply to beef cattle, sheep, goats, bison and elk, according to the province.

Those animals can either be purchased or be replacement heifers kept back from the producer’s own herd.


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Why it matters: Cattle representing decades of careful genetic cultivation were lost this year as producers were hit with a historic drought.

“I feel that we got it right because we kept the politics out of it,” Manitoba Agriculture and Resource Development Minister Ralph Eichler said of the program.

Organizations like the Manitoba Beef Producers (MBP), Keystone Agricultural Producers, Manitoba Forage and Grassland Association and the Association of Manitoba Municipalities were all involved in developing the program, he noted.

“We listened and we adapted and developed this program in consultation with them,” he said. “So, I feel so good about that.”

The great drought
The new program fulfills an ask from livestock groups such as MBP, that say drought caused a serious bleed of local beef genetics, particularly in the Interlake, one of the hardest-hit regions of the Prairies.

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The result could be seen in the sales ring. Auctions like the Ashern Auction Mart, which typically close through the prime grazing season, instead saw thousands of head pass through their doors, including prime breeding stock, as producers were forced to cull.


In early August, farmers learned that AgriRecovery would be triggered this year, with the province and federal government eventually announcing a joint $155 million for Manitoba livestock producers.

On Aug. 31, the province launched two initial AgriRecovery programs, meant to address immediate need for feed. Those programs laid out reimbursement for drought-stricken farmers to either purchase and transport feed to their farm, or transport cattle to better feed.

Producers were told to expect a third herd rebuilding program at that time.

Carson Callum, general manager of the Manitoba Beef Producers, generally welcomed the Nov. 30 announcement.

Callum said the new offering was “an important program for producers” as the industry looks beyond the drought and towards restoration.

“The drought itself had such a detrimental impact on our many operations in the province,” he said. “Hopefully this particular program and the details in it will be a step forward.”

He highlighted the chance for producers to get support for keeping their own animals, and therefore their own genetics, as well as new stock purchases.

“It generally will do its purpose,” Callum said.

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Program details
The program limits application to farmers with at least 10 animals, and animals culled under the herd rebuilding program will not be eligible for the two earlier AgriRecovery streams.

There will be two steps to the program, the province has said. Producers must first submit their herd inventories, as impacted by the drought.

The program will measure the overall hit to a producer’s herd by comparing the number of breeding females as of March 16, 2022, versus breeding female counts a year earlier, prior to the 2021 drought.

A breeding female is considered a mature female who has already given birth or been exposed to breeding.

Payments will be determined by how many of those breeding females a producer replaces next year, whether through purchasing animals or retaining heifers to be bred for the first time in 2022.

Starting Dec. 1 of next year, producers can report their post-drought inventory — the second step of the program.

The program will count the number of females bred by Jan. 31, 2023 (the recovered inventory), minus the number of breeding females on March 16 of 2022 (the drought-impacted inventory).

That number will then be multiplied by a per-head payment rate. Producers can expect $250 per head for replaced beef cattle, elk or bison, or $50 a head for sheep or goats. Payments will max out once a producer matches their pre-drought breeding stock numbers.

“This is to replenish the herd, not to grow the herd,” Eichler said.

Forms for the Herd Management Drought Assistance program will be available Jan. 10, 2022, the province said.

That timeline still leaves room for producers to sell off any remaining culls or open cows by the end of the year, Eichler noted.

“I know some of them maybe want to wait and see how much snowfall we get before they start replenishing, and that’s not necessarily a bad thing,” he said, noting that a surge in cattle purchases would drive up price.

Wide-enough window
Eichler also argued that the program’s window leaves enough time for producers to be financially able to source replacement animals and get them bred by next January.

“That’s a whole year, so I don’t see any problem there,” he said.

Payments for other AgriRecovery programs have been turned around in four to five days of submission, he noted.

If cash flow is a barrier, there is also the possibility of loans through the Manitoba Agricultural Services Corporation, he said.

“I don’t want any producer to have to feel that they’re financially strapped,” Eichler said. “If it’s a money thing that’s just in and out, that’s not going to be a major problem. That’s really the intent, to be able to help them get those numbers back to meet their plan.”

The program offers a “good window,” Callum said, although he acknowledged that finances might be an issue in places with cumulative years of drought impact.

Beef producers in Manitoba also reported culls back in 2019, in many of the same areas that struggled this year.

“There will be those concerns across the landscape and it’ll all depend on the individual operation and what their current status is,” Callum said.

[The Don]

Thanks for the information NOBS.
Not a great program in my opinion.
You get $250 to hold onto a cow that will lose you +/- $650 a year. So you only lose $400 a year .
Looking at the amount of snow in the fields I'm thinking that we will b e dry again next year. I hope I'm wrong. Even if we get reasonable moisture during the year grain prices are going to stay high.
Cattle haven't made money... well forever.
Dairy guys got an increase I'm thinking too small an increase but still something. Cow-calf they dropped the prices.
If they can afford to pay $22 a bushel for canola and over $7.00 a bushel for oats why can't they pay the true cost of production for the cow-calf producers? I'm not thinking the creative accounting that most of the Governments and cattle organizations use. Establish a benchmark price based on real business protocols.

[DaneG]

Benchmark prices and cost of production guarantees sounds a lot like supply management, not saying it’s a good or bad direction but our existing dairy herd would go a long way to fulfill our domestic beef consumption. Most of the beef herd would not be required in a supply management model, guess we can’t loose money if we don’t have them!

[The Don]

A benchmark price may not be the best plan. The Americans would go crazy if there was a supply managed beef industry in Canada.
However what there is now is not sustainable. Looking at the futures prices this will continue. When I look at the reports from Canadian Cattleman's or Manitoba Beef producers they keep saying things aren't so bad. Prices were better than we anticipated so it's all ok. The methods they use for accounting are similar to Donald Trumps creative accounting systems.
Selling cows now @.65/pound (+/-$800) and producing a heifer or buying a bred animal for $2000+ in 2023 a $1200 loss so you can get $250 is not make good business plan. That and carrying on so you can lose $650 a year has very little appeal.
What realistic plan does the Government or Beef Industry Groups have?

[15444]

Most areas of North America have been priced out of cattle production. Guys lied to themselves as to the viability of their operations by using off-farm income to subsidize the on-farm loss. That practice caught up to a lot of guys this year.

It will be worse next year for guys that have a big bank note and only 1/2 the cows to pay for it. Is wifey going to be as understanding when hubby says they have to tighten their belt to pay the farm loan?

There is a big exodus coming. Hoping it's just the older guys and not all the young ones, but the old guys are dropping dead and the young ones are flirting with bankruptcy.

[The Don]

Couple those bills with the inflation and the increasing interest rates. This is not looking good.
Manitoba Government got a pile of cash for the livestock sector from the Federal Government. The programs they are establishing are short term hang on to those cows. These programs do nothing to fix the fact that the cattle market has no correlation with the cost of production for the cow-calf operator. Why hang on to the cows simply to continue losing money. The production insurance programs are a joke. When you are losing $500 a cow a year a possible $40 insurance pay out just doesn't matter.
This is not a problem that has just occurred . The cow-calf operators have bankrolled the industry for a long time.
So... what will change?

[DaneG]

https://www.cattlerange.com/articles/2021/12/betting-the-ranch-and-losing/

This article is about a specific fraud case but it also points out some underlying problems with the cattle/beef industry.

[The Don]

https://www.cattlerange.com/articles/2021/12/betting-the-ranch-and-losing/

This article is about a specific fraud case but it also points out some underlying problems with the cattle/beef industry.

Interesting to read. Thanks