November 2, 2023

 

Drought threatens Alberta, Canada cattle industry, feed assistance programme insufficient

 

The cattle industry in Alberta, Canada is grappling with a severe crisis due to another year of relentless drought, and while the recently announced AgriRecovery programme is expected to provide some relief, representatives from the Alberta Beef Producers argue that it won't be sufficient to ensure the sector's stability, Alberta Farmer Express reported.

 

The Alberta government has pledged CAD 66 million, with an additional CAD 99 million from the federal government to support ranchers facing extraordinary costs associated with obtaining feed and managing prolonged drought conditions. This federal contribution is part of a CAD 219 million assistance programme under AgriRecovery, being extended to Alberta, British Columbia, and Saskatchewan.

 

Sheila Hillmer, vice-chair of Alberta Beef Producers (ABP), acknowledged the assistance,  but expressed concern that it might not be enough. She emphasised the need for a proactive programme to secure the long-term viability of the cattle industry. The ongoing reduction in cattle numbers and a lack of adequate business risk management programs are pressing issues, Hillmer stated.

 

The declining cattle numbers are partly attributed to better profitability and sustainability in crop farming, leading to the conversion of land from cattle farming to crop cultivation. Producers are shifting towards crops due to more substantial profits and the ability to offset losses with existing programmes, according to Hillmer.

 

This perspective aligns with previous statements from ABP chairman Brodie Haugan, who highlighted the urgency of implementing better-tailored business risk management programs, specifically designed to meet the unique economic and logistical factors of the beef industry.

 

AgriStability, for instance, is seen as an area that could benefit from tailoring to the beef industry. Currently, it is often viewed as a one-size-fits-all approach that doesn't consider the specific needs of cattle producers, especially cow-calf operations.

 

Cow-calf operations have low cash flow, mainly produce their own feed, and don't intend to sell it, making it challenging to quantify financial shortfalls. Furthermore, cow-calf operations rely less on hired help, which doesn't align with the programme's calculation of labour costs.

 

Representatives from Alberta Canola Producers and Alberta Grains indicated that most of their members could rely on crop insurance. Ian Chitwood, vice-chair of Alberta Canola, noted that crop insurance was viewed as adequate to address losses resulting from drought.

 

Shannon Sereda, director of Government Relations, Policy, and Markets for Alberta Grains, highlighted that while they would collaborate with the government to trigger an AgriRecovery solution, if necessary, various criteria must be met, such as assessing whether existing programmes cover the loss and determining if extraordinary costs beyond normal circumstances require support.

 

The drought's widespread impact across a specific region is another significant consideration for AgriRecovery. There is a challenge associated with crop insurance, as multiple-year use can lead to higher premiums, which can become a financial burden for subscribers.

 

-      Alberta Farmer Express