Beusekom quoted feed barley at C$280 to C$285/tonne delivered to Lethbridge, having lost C$5 to C$10 per tonne over the last week. He stated that was “a pretty good move down” for the commodity. He said feed wheat backtracked by the same range, with prices at C$305 to C$310/tonne.

“Corn coming from the U.S. today, will deliver to a feedlot at roughly C$295/tonne,” he said, noting “all three of these commodities are within spitting distance of each other.”

Beusekom explained the livestock feeders remained well covered, which has put pressure on feed prices. He said they made their purchases of U.S. corn during the height of last summer’s drought.

“Livestock feeders thought we would be significantly short on barley. So they went out and bought corn and they bought a lot of it. That covered whatever we were short on barley,” he said, pointing to a second reason for declining prices.

“Once farmers knew what they had, they refused to engage in selling it. They held on to it. Prices have been in a downtrend for seven months. Each week and each month the market is lower than the previous week or month,” Beusekom continued. “Even when [farmers] should have been making barley sales, feedlots were again forced to buy even more corn. Today that means you now have a surplus of barley.”

Beusekom pointed to the stocks as of Dec. 31 report from Statistics Canada that was released on Feb. 8. Barley stocks were estimated to be 5.45 million tonnes, up from the 5.17 million the previous year. With that, he said barley could see ending stocks of about two million tonnes when the 2023/24 marketing year wraps up at the end of July.

“That’s absolutely bearish for barley,” he warned.

Last month, Agriculture and Agri-Food Canada forecast the barley carryout for 2023/24 at 750,000 tonnes, up from 709,000 in 2022/24. And AAFC projected the 2024/25 carryout at 800,000 tonnes.

Also, the Canadian Grain Commission reported the amount of barley in the commercial pipeline were lower than a year ago. The CGC said producer deliveries of barley at through 27 weeks of the 2023/24 marketing year were 2.18 million tonnes versus nearly 2.99 million a year ago. Exports so far reached 962,300 tonnes versus almost 1.74 million, and domestic usage slipped to 773,300 tonnes from 839,800.

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Ideas that Canadian production ended up above earlier expectations were also keeping a lid on the domestic market.

Delivered barley into the Lethbridge, Alta. area is currently priced in the $300-$320 per tonne range, according to brokers in the region. That’s down by about $20 per tonne at the top end over the past month, and well below bids at this time a year ago that were topping $400 per tonne.

U.S. corn imports “continue to handcuff and prevent any price growth in this market,” Alberta grain brokerage Agfinity said in a market report. They also noted export opportunities would likely be slow in 2024, due in part to increased Chinese buying from other exporting countries.

Canada has exported 742,700 tonnes of barley through the first 16 weeks of the 2023-24 marketing year, according to Canadian Grain Commission data. That was down by 29 per cent compared to what moved during the same time the previous year.

While less barley is leaving the country, more corn is coming in. U.S. Department of Agriculture export data for the week ended Nov. 23 shows that Canada has already imported 265,800 tonnes of U.S. corn during the marketing year that began Sept. 1. That compares with only 67,400 tonnes of accumulated imports at the same time the previous year. There are an additional 538,600 tonnes of corn already on the books slated to move later, more than double the previous year’s outstanding sales.

Meanwhile, Statistics Canada is expected to confirm a larger Canadian barley crop when it releases its first survey-based estimates for the 2023-24 marketing year on Monday (Dec. 4).

Trade guesses range anywhere from eight million to 8.8 million tonnes, which would be up from the 7.84 million-tonne model-based forecast released in September, but still below the 9.99 million tonnes grown in 2022-23.

Central and northern Alberta saw “fabulous” barley yields, according to analyst Jerry Klassen of Resilient Commodity Analysis, although he added that would be offset by drier conditions in southern Alberta and western Saskatchewan.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

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An order in council amending the provincial Feeder Associations Guarantee Regulation was approved Monday, raising that program’s individual and joint-membership loan limit to $3 million, from $2 million (excluding advances).

The program, which dates back to 1936, typically backs about 17 to 24 per cent of Alberta’s calf crop each year, by way of government-guaranteed, low-interest leveraged financing.

The program is open to Alberta-residing farmers of at least 18 years of age who own or lease land and whose participation is approved by one of Alberta’s 45 local feeder associations. Those associations today have about 2,100 cattle and sheep producer members in all.

Agriculture Minister RJ Sigurdson, who was named to the post last month, announced the new loan limit in a release Monday. He described feeder associations as “an essential part of Alberta’s livestock industry and… a proven way to support new entrants in primary agriculture.”

Monday’s order in council makes short work of an assignment in Sigurdson’s mandate letter from Premier Danielle Smith. That letter, dated last Thursday, specifically tasks Sigurdson with delivering on a “platform commitment” to raise the loan guarantee to $3 million.

“Cattle prices have increased 25 per cent since the start of the year and are expected to keep rising,” the province said in its release Monday. “Alberta’s livestock producers are in greater need of easily accessible, low-interest capital backed by a government guarantee.”

Philipp Lammerding, chair of Feeder Associations of Alberta, said Monday the increased limit provides “much-needed support to our existing feeder members while making this capital-intensive business more viable and accessible to new entrants and young farmers in the current market environment.”

The program’s individual loan limit was last raised in late 2018, when it was doubled from the previous $1 million.

The feeder program’s overall loan guarantee limit also got a boost in late 2022, to $150 million from the previous $100 million. That previous limit had been set in 2016, up from $55 million.

Other tasks listed in last week’s mandate letter for Sigurdson include working to reduce barriers to interprovincial meat trade; carrying out plans for irrigation upgrades; and looking at ways to boost nitrogen production from the province’s petrochemical sector to improve the availability of N fertilizer. — Glacier FarmMedia Network

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Traffic halted on CP lines just after midnight ET Sunday morning as the company fulfilled its lockout notice on about 3,000 workers. The company said it had been served with strike notice from the workers’ union which was due to take effect at the same day and time.

Negotiators for CP and for the Teamsters Canada Rail Conference, which represents the workers, “remain at the table,” federal Labour Minister Seamus O’Regan said on Twitter Monday. “We have faith in their ability to reach an agreement. Canadians expect them to do that ASAP.”

O’Regan added he would remain “here in Calgary until they do.”

A negotiated settlement, however, can’t come fast enough for representatives of the Canadian Cattlemen’s Association, National Cattle Feeders Association, Grain Growers of Canada and Fertilizer Canada, who on Monday afternoon in Ottawa called for back-to-work legislation.

Groups have been pressing for the company and union to reach a deal, CCA president Bob Lowe said at Monday’s press conference, but with the work stoppage now underway they “have to ask the federal government to intervene and implement back-to-work legislation immediately.”

The drought-dented Prairie harvest of 2021 has left cattle producers and cattle feeders across the region dependent on feed corn railed in from the U.S. via CP, whose lines provide the most direct connections between U.S. railways in the Plains states and the cattle-feeding regions of southern Alberta.

“We already have experienced the significant impact disruptions in rail can have on our producers, as this January due to (the omicron variant of COVID-19) and cold weather, trains were delayed and this resulted in severe feed shortages and some cattle producers coming within hours of running out of feed,” Lowe said Monday.

Trains have been running these past several weeks, he said, but producers “have not been able to build a stockpile of feed and currently we only have a one- to two-week buffer of feed in the system before we won’t have any feed for our cattle.”

To put the region’s feed corn needs in perspective, NCFA chair James Bekkering said CP in 2021 alone imported 8,100 cars of corn, he said, up from just 600 in 2020. So far in 2022, he said, the industry has already exceeded that 2021 figure — and consistent transport of feed has “already been compromised for months.”

Cattle require a consistent ration, he said, so feed types can’t be quickly swapped out based on whatever’s most available. Any changes that are made involve working closely with livestock nutritionists to introduce new feeds at a rate that won’t impact animal health. “Cattle cannot simply eat something new each week.”

Trucking U.S. corn into the region is also not an option, Lowe reiterated, noting previous estimates that over 1,000 Super B trucks would be needed each week to replace the volume coming in on CP track — and that level of truck capacity is unavailable.

From grain growers’ perspective, “cash flow is king,” Grain Growers of Canada executive director Erin Gowriluk said at the press conference. The railways represent “the only way to bring what little remains of last year’s grain to market and support what we hope will be a bounce-back season for Canadian crops… For every week that we’re offline, it will take a month to recover from that backlog.”

Also, she said, given the war in Ukraine frustrating grain traffic out of the Black Sea region, Canada’s international customers “require quick reassurance that a spring crop will go in the ground without delays caused by supply chain interruptions.”

‘Already behind’

Fertilizer Canada, which represents fertilizer manufacturers and distributors, “respects the collective bargaining process, but we feel we have now reached the point where the government must intervene,” that group’s executive vice-president Clyde Graham said Monday.

Seeding “four to six weeks away” in Canada depending on the region and sooner in parts of the U.S. to which Fertilizer Canada members export, he said.

“Due to poor rail service leading into the spring season, Fertilizer Canada members are two to three weeks already behind on inventories and storage capacity at fertilizer production facilities,” he said.

There’s a “brief window,” he said, where farmers fertilize crops and are counting on timely supplies to make up last year’s losses.

Seventy-five per cent of fertilizer products are shipped by rail, he said, leaving the group’s member companies “days away from curtailing production and shutting down facilities.”

When asked about hesitancy among politicians across the House to call directly for back-to-work legislation, Graham said “I’m hopeful that equivocation is an attempt to respect the collective bargaining process, and that when the time comes — which is now — to implement back-to-work legislation, the politicians and senators in Parliament will act quickly and decisively.”

Nova Scotia Liberal MP Kody Blois, the current chair of the Commons’ agriculture committee, said at the same press conference that while it was important for the ag sector’s concerns to be aired, he’s “quite confident that members of Parliament across the House understand the implications and how impactful this is, and how problematic it is.”

MPs, he said, “certainly want to be mindful of protecting the collective bargaining process, but at the same time there is a collective interest here, vis-a-vis the fact that we’ve just gone through COVID” with its supply chain impacts, followed by the rise of war in Ukraine “creating a whole new dynamic.”

Canada, “in my view, and I believe in others’ view as well, has a responsibility to be there, not only for our own food security but for global food security.”

Beyond Monday’s press conference, other farm and agrifood sector groups also weighed in Monday with calls for a quick end to the CP stoppage, via legislation or otherwise.

“Farmers have a limited growing season and any disruption to transportation of important inputs will mean we don’t get the seed in the ground with the nutrients that the seed needs to grow and ultimately we will lose out on production,” Grain Farmers of Ontario chair Brendan Byrne said in a separate release.

“Lower production on the farm means less food in the system here at home and less to help those worldwide that will desperately need our help.”

The Western Canadian Wheat Growers, in a separate release, said it held the Teamsters accountable for the stoppage and also called for immediate back-to-work legislation.

The Canadian Oilseed Processors Association, meanwhile, said its members “will be forced to curb production and unfortunately experience preventions and delays in executing customer contracts” due to the CP stoppage.  — Glacier FarmMedia Network

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Calgary-based CP and the Teamsters Canada Rail Conference (TCRC), which represents about 3,000 CP workers across the country, have been in talks toward a new collective bargaining agreement to replace a contract that expired at the end of 2021.

Disputes over issues including pensions, wages and benefits escalated earlier this month when the TCRC announced its members had voted almost 97 per cent in favour of strike action.

A strike thus could have begun as early as Wednesday if the TCRC had served 72 hours’ notice beforehand, but CP instead took the first step Wednesday with its lockout notice.

The lockout will take effect “if the union leadership and the company are unable to come to a negotiated settlement or agree to binding arbitration,” the company said in a release.

CP “simply cannot prolong for weeks or months the uncertainty associated with a potential labour disruption,” CEO Keith Creel said in the same release.

“It was well known that CP was going to force a work stoppage and lock out our members. They have done just that,” TCRC spokesperson Dave Fulton said late Wednesday in a separate release.

During bargaining, he said, CP “continues to dismiss our members’ demands and are unwilling to negotiate the issues they have created.”

CP and Teamster brass have been meeting “daily” with federal mediators over the past week but “our positions remain far apart,” the company said.

Those talks led CP to make a new offer Tuesday which “addressed a total of 26 outstanding issues between the parties, including an offer to resolve the TCRC’s key issues of wages, benefits and pensions through final and binding arbitration,” but the Teamsters on Wednesday rejected that offer, the company said.

Instead, CP said, the TCRC “continues to table additional work rule demands” and has made “an even more onerous pension demand” which would “be even more destabilizing to the pension plan for all of CP’s unionized employees, not just the 10 percent who are TCRC members.”

The Teamsters, in a separate statement Tuesday about pension matters, countered that their request “is by no means unreasonable” and calls for what the union said would be its first pension cap increase in 10 years.

The union said its pension request “does not negatively impact other members of the plan or the overall sustainability of the plan. In fact, several other unions have already received pension improvements similar to our request.”

‘Terrible to catastrophic’

All that said, federal Labour Minister Seamus O’Regan on Wednesday said he and Transport Minister Omar Alghabra “are encouraged to see that both parties are still negotiating” and urge both parties to “consider making the compromises necessary to reach a deal that is fair for workers and the employer.”

O’Regan said he and Alghabra have said as much to the company and union directly, adding that the Federal Mediation and Conciliation Service “remains with them at the table to assist them in their negotiations.”

O’Regan, in his statement, said the ministers “understand the impacts of a potential work stoppage and are monitoring the situation closely” but did not mention the possibility of ending the dispute through federal legislation.

The government, he said, “respects and has faith in the collective bargaining process, because we know that the best deals are the ones reached by the parties at the bargaining table.”

The Western Grain Elevators Association, which represents the Canadian Prairies’ major bulk grain handlers, said Tuesday it’s “imploring” CP and the TCRC to either reach a deal or agree to binding arbitration.

Otherwise, the WGEA said, it’s “imperative that the federal government step in and impose a process for a fair and reasonable resolution.”

“Despite this year’s 35 per cent smaller than average crop due to drought, the railways have struggled to meet even half of our weekly demands for rail service the past few months,” WGEA executive director Wade Sobkowich said in the group’s release Tuesday.

A work stoppage at CP now, he said, “would take the situation from terrible to catastrophic, crippling the flow of goods throughout the Canadian economy.”

Western Canada’s drought-dented feed grain supplies have also left the region’s livestock feeders more reliant on CP this year to rail U.S. corn into the region.

A railway work stoppage now “will devastate the livestock industry that is reliant on U.S. corn to feed over (one million) animals,” the Saskatchewan Stock Growers said on Twitter Wednesday following CP’s lockout notice.

Fertilizer Canada, in a separate statement last Friday, warned that about 75 per cent of all fertilizer produced and used in Canada is moved by rail, with “no other alternative transportation method that currently has capacity or can be brought online in time to mitigate the impact of the work stoppage.” — Glacier FarmMedia Network

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“Everybody is waiting on the corn situation to figure out where we’ll go,” said Suzanne Leclerc, owner of Market Master Ltd. in Edmonton. “Buyers are buying as short as possible, waiting for the corn trains to come.”

The U.S. corn harvest was 18 per cent complete as of Sept. 18, according to the latest data from the U.S. Department of Agriculture. Some of that corn has already been purchased by Canadian feeders to help supplement tight domestic supplies, but large shipments have yet to make their way north.

Leclerc said any logistical issues or delays bringing up corn could lead to some swings in domestic grain prices, depending on how large a shortfall needs to be covered.

Distillers dried grains (DDGS), the byproduct of producing ethanol, are another cheaper feed option likely to find their way into more Canadian rations this winter.

However, Leclerc noted, adjusting rations takes time and not every livestock feeder may want to use as much corn or DDGS as others.

“Everything is pure volatility,” Leclerc said of the general sense of uncertainty in the markets — although she added the feed market has never been as strong off the combine as it is this year.

“There’s a lot of opportunity right now and a lot of unknowns farther out.”

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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The overall feeder complex was softer last week as feed barley prices jumped another $5-$10 per tonne; imported corn values were also up $3-$6 per tonne in the Lethbridge area. Finishing feedlots continue to be aggressive for quality yearling packages fresh off grass; however, backgrounded yearlings traded $3-$5 below week-ago levels. Discounts for fleshier yearlings were more severe this past week. Buyers appeared to incorporate a risk discount in some cases due to rising COVID-19 cases and the looming U.S. election. Friday’s Cattle on Feed report from the U.S. Department of Agriculture was expected to be somewhat bearish for the deferred live cattle futures, which also contributed to the softer tone. Auction barns in the eastern Prairie regions had larger volumes last week with many locations holding their first major sale of the season. While Alberta feedlots focused on local cattle, the additional competition took the steam off the market.

In the Lethbridge area, red white-face steers just off grass weighing 885 lbs. dropped the gavel at $199. South of Edmonton, mixed steers averaging 890 lbs. were valued at $188 and tan heifers averaging 875 lbs. were quoted at $176. In northwestern Manitoba, a group of medium- to larger-frame Simmental-blended steers weighing just over 900 lbs. were quoted at $183 and black heifers averaging 890 lbs. were reported at $170.

Calf prices were quite variable across the Prairies. Feedlots were more aggressive for the 700- to 800-lb. feeder that was on light forage diet; however, buyers shied away from bawlers under 700 lbs. In central Alberta, tan mixed steers on light silage diet weighing 790 lbs. were quoted at $194 while red mixed heifers weighing 720 lbs. were valued at $188. In Manitoba, tan steers averaging 525 lbs. were reported at $222 and Charolais-blended heifers averaging 530 lbs. sold for $188. South of Calgary, Angus-based steers weighing 610 lbs. were quoted at $225 and black mixed heifers averaging 600 lbs. were reported at $184.

The market has a fair amount of uncertainty in the short term. Rising COVID cases, a looming U.S. election and currency volatility are a few factors in the minds of cattle feeders. USDA’s report showed a year-over-year increase in cattle-on-feed inventories and we still have a large supply of fed cattle backed up on Alberta and U.S. feedlots. Therefore, it’s hard to be bullish on the feeder market in the current environment.

— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339 or via his website at ResilCapital.com.

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Cargill’s meat processing plant at High River, Alta. slaughters roughly 40 per cent of all the cattle butchered in Canada.

The plant is to be idled indefinitely after more than 350 people connected to the facility, either as employees or family, were confirmed as contacting COVID-19. At least one person has died.

The High River closure will impact the way cattle are fed as long as the facility remains closed, said Brandon Motz, of CorNine Commodities at Lacombe, Alta.

“It will back them up in the feedlot, which will force the feedlots to change their ration,” he said. Rather than feeding a high-calorie ration to fatten the animals, the focus will be on more roughage and a maintenance, slow-growth diet.

“Overall, those cattle will still take ‘x’ amount of grain to fatten,” which could result in increased demand in the long run as the cattle remain on feed for longer, Motz said.

However, he added, any seasonal price strength is unlikely, as demand will be pushed farther back.

“We haven’t seen a drastic change in pricing, but I think it’s coming,” Motz said. He expected continued uncertainty in the cattle market would cause many feeders to move to a hand-to-mouth program rather than buying farther out.

“It’s just an extremely uncertain time, and prices will be changing rapidly.”

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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“There are about 4,000 more that are expected to arrive shortly, so the process is starting to work,” Janice Tranberg, the association’s president and CEO, said during a telephone town hall Wednesday.

Ottawa has made a number of moves on the farm labour front, including offering a program that will pay $1,500 for each foreign worker arriving in Canada to help cover the costs of a mandatory two-week self-isolation period.

The federal government has also revamped its student summer job program, which will now pay all of the wages of students hired on farms and ranches.

“With respect to labour, we understand that there are a number of Canadians looking for employment in agriculture and this is a really good opportunity right now,” Tranberg said.

“But there’s also a need for employees who can be skilled and readily employed — a lot of these people enter Canada through the temporary foreign workers program.”

About 50,000 to 60,000 temporary foreign workers are hired for agriculture and agri-food jobs annually, and there are still about 15,000 vacant jobs, Tranberg said.

— Alexis Kienlen reports for Alberta Farmer from Edmonton.

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Due to extremely limited processing plant capacity, an uncompetitive market and disruptions to trade and market access, Ontario’s beef industry was losing an average of more than $2 million per week last year and into 2020. The effects of COVID-19 are expected to aggravate this situation, despite the recent upturn in retail demand.

“Even with the ballooning box beef prices at retail, the price feeders are receiving for their cattle have not kept pace, despite rebounding cattle prices in other competing jurisdictions, including those in Western Canada,” said Beef Farmers of Ontario president Rob Lipsett, a cow-calf producer at Annan, Ont.

Limited processing plant capacity in Eastern Canada is one of the major factors in the existing crisis. Utilization of packing plants in the region rose from 85 per cent in 2016 to 95 per cent in 2018, restricting processing capacity and competition in the marketplace. This issue intensified in December with the closure of Ryding-Regency, the province’s third-largest packing plant.

Why it matters: Because of Eastern Canada’s limited processing capacity, many producers are feeding cattle for longer than expected, raising input costs. They then face penalties for overweight animals once they are finally sent for processing. This has resulted in producers losing $180-$300 per head on average for the past year.

“The depths and prolonged nature of the market losses experienced by beef farmers in Ontario have not been seen since the BSE crisis of the 2000s,” says Lipsett.

The impact of COVID-19 is adding pressure to an already financially strained feeder sector. One example of this is a reduction in access to dried distillers grains (DDGs).

This, Lipsett notes, is “due to a decline in oil demand, which has resulted in decreased ethanol production and therefore a decrease in the amount of DDG by-product available.” It’s generally more expensive and difficult to source substitutions for this particular ration.

“Everything with respect to COVID-19 presents risks to the supply chain across the country,” Lipsett said. “With that said, industry is working closely with industry and government partners across the supply chain to ensure contingencies are put in place, and cattle and meat continue to flow.

“However, even by minimizing disruptions in the beef supply chain, Ontario feedlot producers continue to face serious profitability challenges in the wake of the prolonged losses.”

BFO is among the many agricultural associations that have asked federal and provincial governments to enhance business risk management programs immediately, as well as other measures to support beef producers. The association’s recommendations were sent to both the federal and Ontario provincial governments on March 20.

“What impacts COVID-19 will have in the short, medium and long term are unknown, which is why it’s vitally important for governments to enhance farm safety net programs to ensure farm viability can be ensured if the market impacts of COVID-19 get progressively worse,” Lipsett said.

The full list of BFO’s recommendations is available on the association’s COVID-19 Updates webpage. The list includes:

• Uncapping the provincial risk management program.
• Providing an AgriInvest stimulus, contributing a minimum of five per cent of allowable net sales without producer matching contributions, making withdrawals tax-free and increasing overall funds that can be accessed.
• Raising the AgriStability trigger to 85 per cent, removing the reference margin limit and making enhancements retroactive to 2019.
• Removing late participation penalties and allowing producers that have exited the programs to re-enroll.
• Creating a fed-cattle and cull-cattle set-aside program to help manage the supply of cattle.

In early March, BFO requested an Ontario Cattle Emergency Assistance Program from the federal government. This included “business risk management funding to address the shortfall in current programming,” according to a March 6 press release.

— Piper Whelan is a field editor for Canadian Cattlemen at Airdrie, Alta.

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