Wednesday, August 18, 2021

Drought conditions impacting cattle prices across the Prairies

By Quinn Campbell
Global News
Posted August 16, 2021 


Cattle producers across the Prairies are facing some tough decisions this year due to the widespread drought. As Quinn Campbell reports, with so many cattle going to market, prices are expected to soften as the fall run continues.

As drought conditions and wildfires continue to worsen across the Prairies, the volatile market continues to keep those in the agriculture industry on edge.

“This fall, this next five to six months, is going to be dramatic with the number of cows, unfortunately, that are going to come to town and the only place for them to go is to slaughter,” said Bob Balog with Balog Auction Services in Lethbridge.


READ MORE: ‘It’s looking terrible’: Alberta ranchers struggling in provincial drought

Balog said the calls just keep coming from concerned producers spanning all the prairie provinces.

“Most of the calls coming in have been about a lack of pasture, now the last 10 days we are getting lots and lots of calls because people are out of water. So it’s a double whammy, there is a third whammy with the fact there is very little, if any, hay.”

READ MORE: CFA working on initiative to send hay from Eastern Canada to Western farmers

Senior analyst Brian Perillat with CanFax, a division of the Canadian Cattlemen’s Association that tracks cattle market data, said the drought has driven the price of slaughter cows down about 20 cents a pound and August is usually the strongest month for price of the year.

“It takes a good cow probably to make 80 cents now. Lots of cows trading in the 70 cent range. In June, a couple months ago, we were over a dollar a pound. And some of these cow prices are pretty much the lowest we’ve been in August in almost 10 years,” added Perillat.

Perillat added a continued downslide is expected into the fall for cattle. The early price on calves is holding on, but it’s also expected to slip as the realities of the drought continue for farmers and ranchers.

“Some of those five weights, six weights are just over two bucks a pound, $2.10 to $2.15 in spots, which is close to where it was a year ago. And last year wasn’t a great market either.”

The federal government announced Sunday it is increasing the AgriRecovery funding up to $500 million to address the extraordinary costs associated with the drought and wildfires, that includes the $100 million announced at the beginning of August. The rollout has not been finalized.

READ MORE: CFA working on initiative to send hay from Eastern Canada to Western farmers

Hay crimes expected to grow in southwest Saskatchewan as drought persists


The Canadian Federation of Agriculture is also looking into sending any extra hay from farmers on the East Coast to farmers in Western Canada, to help ease the burden. Balog said any help is a step in the right direction, but it needs to come now.

“If they can find hay, which is going to be a problem, they need to buy it, if they are going to bale crops up, they need to do it right now. So time is of a very significant factor right now and all the help we could get, the sooner the better.”

Perillat said if farmers can look ahead, there is some optimism. With less cattle in North America in the coming years, the futures prices are looking optimistic in the long term.

“April futures are 140 which is some of the highest levels we have seen in five, six years.”


READ MORE: Severe drought in Alberta brings on early harvest

The season is just beginning, and Balog said only time will tell just how disruptive the drought will have been, especially since it is hitting all aspects of the agriculture industry.

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