Some short supplies in Western Canada, and U.S. cattle producers are also looking to buy Canadian hay
Feed shortages may be on the minds of some cattle producers this year, but it will most likely depend on where they live.
Good supplies in Saskatchewan
Shortages are not much on the minds of Saskatchewan producers at the moment, with the Saskatchewan Forage Council (SFC) reporting 2012 has been another good year, thanks to plentiful moisture across most of the province that has given hay yields at or near average.
Many Saskatchewan producers also had some significant carryover stock from 2011, which is allowing some to take advantage of shortages in the U.S. and Ontario.
“Saskatchewan hay producers are beginning to capitalize on this demand by shipping hay into the U.S. and eastern Canada,” says the SFC in a late-summer hay and pasture report. “There are reports from around the province that shipments are going south under various arrangements. Regular calls are being received by both government employees and the Saskatchewan Forage Council from producers interested in selling hay to the U.S.”
Alberta, despite some warm, dry conditions throughout much of the province in July and August, still has very good soil moisture ratings, which is giving average or above average hay yields and good quality for most producers in the province.
“We are not anticipating feed shortages,” says Grant Lastiwka, grazing/forage/beef specialist with Alberta Agriculture and Rural Development. “Production across Alberta is variable, with some good quality first cut and the rest similar to what we have seen in the past two years.”
Drier in Manitoba
In the southeast corner of Manitoba, however, the prospect of feed shortages is definitely a concern, with hay production down anywhere from 25 to 50 per cent for many producers in the parched area.
“Our hay production is probably about 55 per cent of what is normal for us,” says Heinz Reimer of J.V. Ranch — a division of Hylife Foods Ltd. The ranch, near LaBroquerie, usually produces more than enough hay for its 750 to 800 cow-calf pairs and an additional 750 feeders per year — around 7,000 round bales annually on 10,000 acres of hay and pasture land.
Reimer isn’t panicking quite yet thanks to a 25 per cent carryover from last year’s hay production, which will help, but he has purchased some hay and timothy straw and is looking around for more just in case, but admits it’s getting harder to source any locally.
“I started looking about a month ago and most producers said ‘talk to us a month from now and we might have some.’ I had one guy who thought he would have 1,000 bales for me, but he called me back and said ‘I just didn’t get it so I can’t help you this year,’” says Reimer, who is usually selling, not buying hay.
Other areas of Manitoba are reporting average production, with the possible exception of central and south Interlake, which is still battling problems associated with last year’s flood and is reporting that hay production is down by around 25 per cent.
Although he doesn’t think feed shortages going into winter will be acute for most producers, Glenn Friesen, provincial forage specialist with Manitoba, Agriculture & Rural Initiatives (MAFRI) has seen more straw being baled this fall. He says producers who are feeling the pinch will probably be blending straw and barley into the diet to stretch existing hay supplies.
Demand increases prices
Hay prices are already up as a result of speculative buying from U.S. brokers who have been coming north for several weeks trying to secure first-right-of-refusal on future production on behalf of desperate cattle producers in the U.S. Midwest, who usually rely on corn feed, supplies of which are virtually nonexistent, following a record drought.
This has already had a significant impact on the price of hay. Round bale prices are anywhere from $50 to $60, and if producers have to travel any distance to source them, costs can escalate. Reimer estimates if he has to make an eight-hour round trip to pick up bales at $90 to $100 an hour for the cost of the truck, fuel and labour, when loading time is also factored in, it’s costing him $30 a bale in additional costs. With each cow eating six to seven bales a winter it soon costs more to feed the cows than they are worth.
That said, it doesn’t appear too many producers are considering selling extra cows. “We did a survey across the south east recently and it doesn’t look like too many producers are planning on decreasing the breeding herd amounts,” says Ben Hamm, a cattle producer from the Vita area who also is a business development specialist with Manitoba Agriculture. “They probably won’t be holding back too many heifers, or they may be selling a few cows and keeping back some younger animals that require a little bit less feed,” he says”
Most producers at time of writing were still sitting back waiting to see how the feed situation pans out this fall. Higher grain prices could add some additional costs, but there is also potential for some corn crops to be downgraded for feed because of the dry conditions, or for alternative feeds such as sunflowers, that don’t make grade, to provide some additional feed resources.
Test feed quality
Hamm advises producers to make sure that they test the quality of their feed before they begin to blend in straw or other alternatives.
“Producers need to get an accurate feed inventory of amounts and the feed quality on their farm,” he says. “If a producer was cutting hay in July and it was dry, that hay might only be as good as straw itself. He needs to find out what he has for inventory before he can come up with any kind of plan.”
Hamm says he encourages producers to do feed tests before they incorporate any kind of straw into the diet, and suggests feeding straw earlier in the gestation period, as well as limiting amounts to avoid compaction.
“The effects could be long term because if they don’t have good body condition scores (BCS) going into winter, and they deplete the BCS over the winter, next year there’s going to be problems for re-breeding, so there’s all kinds of issues that they face,” Hamm says.
Reimer’s feed quality has turned out to be better than most years and he has been able to develop a plan based on that.
“Basically we are going to be feeding some straw and, on our calves that we keep back, we will probably try to top it up with maybe a little more grain,” he says. “The good thing is that the hay samples we have tested this year have shown the feed quality is definitely been better than in past years. So that will allow us to do some blending.”
What is more of a concern than the immediate spike in hay prices caused by the U.S. situation is the longer-term effects that a prolonged period of low production there could have on the whole industry, says Friesen. “Optimism is important, but spreading your risk is what separates you from the rest,” he says. “Everyone should remember no market is a sure thing. There’re many signals pointing to strong beef prices for the next while, but this season is a good example of how vulnerable those prices are when the feed crop is short”
Reimer, on the other hand, has a different take on the issue of crises, having lived through more than a few.
“As farmers we are always optimistic,” he says. “I lived through the drought of 1980 and 1988 and I think 1988 was worse. Whenever you do have a drought the quality of the hay always seems a little bit better, which definitely helps cope if feed supplies do get tight.”
Friesen explains the reason for higher-quality hay in dry years. “With legumes (alfalfa), as the plants lose access to soil moisture they focus less of their metabolic energy on elongating stems, and more on leaves,” he says. “The result is lower stem to leaf ratio, and higher quality.”
With low carryover grain inventories in the U.S., if corn prices stay high and supplies remain tight south of the border that could mean some western Canadian producers have to decide if they should sell some of their hay inventory while prices are good or hold on to it in case next year’s production isn’t as good. †
The Saskatchewan Forage Council has some useful information about selling hay to the U.S. in its August Hay & Pasture Report at the link below:
Saskatchewan Forage,Feed & Custom Service Listing
Manitoba Hay Listing Service
Ontario Hay Listings
Alberta Hay, Straw and Pasture Listings