Some Manitoba cattle producers could end up going out of business as the COVID-19 pandemic adds to their woes, says the vice-president of Manitoba Beef Producers.
"Honestly, with the kind of market volatility that we’ve seen, I think that that’s a very real risk," said Tyler Fulton, who runs a cattle operation near Birtle, approximately 145 kilometres northwest of Brandon.
Producers have already been faced with drier-than-normal conditions in the last two years, "and that left a lot of producers probably drawing on equity in their operations," Fulton said. "There’s only so much that can be done in order to, kind of, save an operation."
Manitoba’s approximately 6,000 cattle farmers hold between 10 and 15 per cent of Canada’s cattle inventory.
While producers each have their own way of operating and their own set of worries, "the common theme is the uncertainty that’s caused by the market," Fulton said. "We’ve had as much volatility in the last three weeks as we have, really, over the last 15 years. It’s incredible to see the price swings and how that has impacted our marketing options."
Uncertainty with respect to the COVID-19 pandemic is playing a major role in that "and probably more importantly the measures that are being taken that, I guess, put in question whether or not our normal marketing practices are still OK, that we’ll still be able to operate business as usual," said Fulton, who is also a director with the Canadian Cattlemen’s Association, the national body representing producers.
The original speculation that demand for beef would be negatively impacted by the pandemic has turned out to be wrong, he said. Instead, there has been a surge in meat consumption and purchases at retail outlets.
While that may seem like a positive thing, farmers have to wonder if that demand will continue months from now, he said, and the product they have on their farms today won’t be going to market until the fourth quarter of this year, at best.
"In terms of direct impact on our operation, we normally would have sold all of last year’s calf crop, really, over the course of the last three weeks," said the third-generation cattle producer. "So what it has done is kind of delayed that action, and you compound that with the fact that it was a really dry year and we were already tight in feed stocks.
"It forces you to make decisions that you wouldn’t otherwise choose to, because you just don’t have the feed for the animals," he said.
And while meat packers are doing extremely well in this environment, they are subjected to the same uncertainty, Fulton said.
Meanwhile, auction houses are limiting how many buyers and sellers can be in the building at one time during the pandemic as they, too, follow social-distancing protocols, he said, adding he has not heard of any closing altogether.
Fortunately, the recent closing of the Canada-U.S. border has so far not led to any major constraints on the movement of cattle between the two countries, Fulton said.
"This is probably the single biggest issue that we would have to deal with, and thankfully the governments have identified how critical that is to our industry and have supported those rules to be put in place that still allow for that trade to happen."
He noted a recent infusion of $5 billion from Ottawa to Farm Credit Canada and the Advance Payments Program will help producers cope during these difficult times.