Feedlot numbers dwindle

Times Contributor   

 

Contrary to rumours, Western Feedlots’ Strathmore location is not closing its doors.

“We are not placing cattle at the Strathmore Feedlot at this time. There has been a reduction in cow herd sizes, so we are utilizing the Mossleigh and High River feedlots until numbers recover,” said Dave Plett, Chief Executive Officer of Western Feedlots.

He said that he expects numbers to increase by the fall. He said the feedlot industry is tight right now due higher feed costs, and lower numbers being sent in for feeding. 

With higher cattle sale prices and better cow/calf profit, farmers are keeping cattle on the land. Stats Canada released cattle comparisons in March 2013, indicating heifers kept by farmers for breeding was up by 5.6 per cent from last year. Feedlot inventory was down by 5 per cent. As of Jan. 2013, overall cattle inventories in Alberta increased 2.2 per cent over 2012. All other regions had declining inventories according to www.statcan.gc.ca.

Farmers have always had to weigh market risks in hold ‘em or fold ‘em cattle strategies because the rise and fall of many factors can influence profit margins. Fluctuations, like demand for exported cattle, feed and forage factors, US economic growth, the Canadian/US dollar exchange rate, other livestock volumes and pricing, retail sales prices, disease or global trends, all factor in decision making. 

Calgary Stockyards President, Don Danard said some people have asked him about predictions on movement for the fall, but he said there are really too many variables to make accurate predictions.

“Business is not good on the finishing end right now,” said Danard. “Some are cutting back on feeding and some have shut down … not all but some … and money is a little tighter.

Jerry Klaussen, a commodity analyst with shares in a Southern Alberta family feedlot, said that feeder cattle prices will remain under pressure over May. He said a softer feed cattle market and higher barley prices will weigh on feeders, in an article he wrote for Meat Trade News.

Plett said Western Feedlot made the decision to consolidate to the Mossleigh site because it made sound business sense; operating two lots at half capacity did not. Plett said that no staff will be laid off, but will move to Mossleigh until business picks up and filling the Strathmore site is cost effective.