While area beef producers are seeing higher prices for their cattle of late, margins continue to be tight as they face higher input costs for things like fuel and feed.
Jack Chaffe, president of the Beef Farmers of Ontario, said Wednesday during the opening day of Gray Bruce Farmers’ Week that calves are selling higher these days when compared to a couple of years ago, but the input cost pressures and other unknowns that may be coming are being watched closely by the industry.
“On the feedlot side of it we are always working on a margin and margins are tight,” said Chaffe, whose family operates a fifth generation beef farm north of Mitchell. “And the packers are tightening up their margins currently. A year ago they had a windfall of profit, but those margins are tightening up.”
Those factors that are beyond the control of farmers are why it is important that there is continued investment in Ontario’s Risk Management Program, Chaffe explained. The program works like insurance to help producers offset losses caused by low commodity prices and rising production costs.
Chaffe said that his main fear as a producer is whether consumers can continue to afford to buy beef as costs go higher.
“I think they can, we just need to do different things with it, like smaller cuts and developing different recipes for the cuts,” he said.
On Wednesday, Beef Day kicked off the 57th annual Gray Bruce Farmers’ Week at the Elmwood Community Centre, a conference and trade show co-ordinated by Gray County Agricultural Services with support from various other businesses, organizations and individuals in the local agricultural community.
Chaffe was one of several speakers on Wednesday touching on a variety of subjects, but all pertaining to the beef industry. Among the speakers Wednesday were Dr. Jordan Thomas on the “Silent Killer” of Cow-Calf Profitability, Holly McGill on Maternal Nutrition and Fetal Programming, Julia Stewart on the Prevention and Treatment of Calf Diarrhea and Betty-Jo Almond on Getting on Track to Use Precision Livestock Tools.
Chaffe, whose family runs a feedlot that markets 2,000 head of cattle per year through the Ontario Corn Fed Beef Program, gave a provincial update from the perspective of the Beef Farmers of Ontario including a market review and some of the government relations and advocacy work being donate.
Chaffe said the province’s cow herd is all across Ontario, but is really seeing a lot of growth in the north, where there is more available land.
“We are seeing some more producers moving up there and those that are up there are seeking more land to grow bigger cow herds,” Chaffe said.
The latest Statistics Canada figures provided by Chaffe on Wednesday show that the Ontario cow herd actually increased by 3.2 per cent, bucking a trend of decreasing herds in many other areas.
Chaffe said it will be interesting to see what direction the herd size is going heading into 2023.
“I know a lot of other provinces across Canada here have really dropped off, but at least Ontario is holding steady,” Chaffe said.
Meanwhile stocker volumes in Ontario were down 2.9 per cent, with Chaffe saying there aren’t as many producers backgrounding anymore with stocker cattle going directly from cow-calf producers to feedlot operators.
He called that a shame as it is an important part of the industry.
“Some of the backgrounders are just custom feeding those cattle with other ownership,” he said.
Meanwhile cattle prices have been trending higher in 2022. The average railgrade (carcass) price in 2022 was $302 per hundredweight, which is up 17 per cent from the prior year.
Chaffe said one of the big reasons for the increase in prices is that outside of Ontario, many areas of North America have experienced significant drought conditions in recent years, including in the US, and western Canada.
“Cow numbers are really dwindling in those areas, so it is more of a supply-demand issue than anything,” he said. “In Ontario, other than up in the Rainy River area where they had some drought a year ago, other areas have been pretty good for feed.”
Chaffe, who is also vice-president of the Ontario Cattle Feeders’ Association and on the board of the Canadian Beef Check-off Agency, where he also serves as finance chair for the Canada Beef Marketing Committee, said there is no shortage of issues putting pressure on the industry and its producers.
On Wednesday he touched on work around a review of the Provincial Animal Welfare Services Act pertaining to farm inspection and enforcement practices, and continued investment by government in Ontario’s RMP.
“I started on BFO eight years ago and there just seems to be more issues all the time that you need to make comments on or meet with MPs and MPPs about,” Chaffe said. “If you are not doing that and not letting them know what our voice is, we are going to get steamrolled.”
One area Chaffe highlighted as a major success through their lobbying efforts was earlier in 2022 when ground meats, including beef, received an exemption from proposed front of package warning labeling.
“That is likely the biggest win the cattle industry has had in Canada since we got the borders open after BSE,” Chaffe said, adding that had it gone through, Canada would be the only country in the world to put a warning on its ground meat.
It has now been 20 years since the BSE crisis hit Canada in 2003 and international borders slammed shut to Canadian beef. While most borders have reopened, Chaffe said they are still feeling some lingering effects, including the “over 30 month rule,” where producers are losing about $135 to $160 per head for animals over that age.
“The problem is the US doesn’t have the same rules and that is why we want to harmonize our rules with the US,” Chaffe said. “It is just a long painful process and hopefully we are going to hear some positive news on that this coming May.”
Chaffe said the organization also continues to target export markets for growth potential, including places like Japan, Vietnam, Taiwan, South Korea, Saudi Arabia and the United Arab Emirates.
“The key to those export markets is that it elevates what a carcass is worth by about $1,000,” Chaffe said. “It is huge to have those markets.”
Chaffe said the federal government recently announced it would develop an Indo-Pacific trade office to continue to develop foreign markets, which he said will be important.
“That is going to be key because it will put boots on the ground in those areas to get some of these trade deals through and trade barriers removed,” Chaffe said.
Gray Bruce Farmers’ Week returned this week to a full in-person conference and trade show this year after being held virtually over the past two years because of the COVID-19 pandemic. This year’s event can also be livestreamed for those who are unable to attend in person.
Gray Bruce Farmers’ Week co-ordinator Lorie Smith said they were glad to be back holding the event in-person.
“Energy is high with a lot of people talking about it on social media. Even yesterday with the trade show setting up there was this palpable energy in the room where people wanted to get together,” Smith said. “Today everyone is chatting and even hugging, which is pretty amazing.”
The annual event, which features producers, agribusiness professionals and industry experts holding talks and panel discussions, is to continue with Dairy Day on Thursday, Goat Day on Friday, Sheep Day on Saturday, Horse Day on Sunday, Ecological Day on Monday and Crops Day on tuesday.
Those who purchase tickets for livestreaming or in-person attendance receive access to conference recordings for 30 days after the event. Viewers also receive 21 pre-recorded “on-demand” presentations.
Along with the speakers and panel discussions, the event includes a trade show and the popular food and lunch menu, which includes hot roast beef, goat and lamb on their respective days and pie for dessert.
“They love the quality of the food, but they also love just chatting with everybody,” said Smith. “We tried to give them that networking ability on the virtual, but it is not the same. They are chatting with the agri-businesses in the trade show and they are chatting with the producers.”
More information is available at gbfw.ca.