Almost all of Manitoba declared eligible for livestock tax relief

Low feed supply prompts a second year of tax deferral

”The rains are timely. They’re just not big enough.” – Pam Iwanchysko, Manitoba Agriculture.

Manitoba’s forage shortage will warrant federal tax relief again this year.

Agriculture and Agri-Food Canada has released its first list of regions eligible for the livestock tax deferral program allowing producers to defer income from cattle sales into the following tax year.

For many municipalities, it will be the second year in a row for the program. A region must average half or less its usual forage harvest to be eligible.

Why it matters: Livestock producers are watching their stands with hope for more moisture, but not every stand is improving and many are already playing catch-up after the first cut fell short.

AAFC had named almost all of agricultural Manitoba eligible as of early July, except areas west of the RM of Emerson-Franklin and toward Whiteshell Provincial Park. A total of 96 municipalities and divisions have been named.

AAFC usually releases its final list of eligible reasons in late fall but was quicker to release its initial list this year. Last year, the federal government approved 63 municipalities in its initial list in mid-September. An updated list was released in November with an extra 17 municipalities, largely in western Manitoba. AAFC later announced an unusual third assessment in January 2019, sparking some surprise by the Canadian Cattlemen’s Association, but also relief from the Manitoba Beef Producers, given the province’s feed challenges. The third list added the RM of Lakeshore.

The initial list does not take the latest rains into account. Eastern Manitoba and patches of central Manitoba saw over 90 millimetres from July 8-10, Manitoba Agriculture reported, although relatively little fell in the northwest and parts of the northern Interlake remain dry. The province’s station in Moosehorn has yet to see soil moisture in the top 20 centimetres of soil climb above 10 per cent this month, although soil moisture has improved in other areas including Arborg.

Dry start casts a long shadow

Pam Iwanchysko, provincial livestock specialist for the northwest, says producers in her area are not out of the woods yet.

“We’ve been missing a lot of the rains, so our hay yields are half to one-third of what normal is. Our pastures are in pretty rough shape and water is a real critical issue right now.”

She said dugout levels and surface water have dwindled and more rainfall will be critical to recharge those sources.
Hay harvest for beef cattle was largely delayed this year as producers opted for quantity.

The Manitoba Forage and Grassland Association’s Green Gold hay quality program estimated ideal hay quality for cutting between June 5 and June 15 this year. The association’s Hay Day marks the points where stands have the best chance of testing around 150 relative feed value, a marker often used for dairy-quality hay.

Most beef producers, however, were holding off this year in the hopes of higher yield and haying was still underway as of mid-July.

Producers are holding out hope that July rains will bring stands back to life when it comes time for a second cut.
“The rains are timely,” Iwanchysko said. “They’re just not big enough. We certainly have seen an improvement since we have had a little bit of rain and here’s to hoping that the second cut will be much better, because our first yields are not encouraging whatsoever, and what is out there right now is being eaten up by grasshoppers.”

Producers in her area have told her they are at the point where spraying for the pest is no longer feasible, she said.
Areas south of Dauphin and around Swan River still sat under 60 per cent of normal rainfall as of July 21, according to Manitoba Agriculture, although much of southern Manitoba had climbed closer to average or above precipitation. Areas along the Saskatchewan border to Russell also sat at near-normal rainfall.

Third cut for some

Some producers in the east were taking their cues from the Green Gold program, cut in June and have already taken a second cut, Green Gold co-ordinator John McGregor said. Those farmers expect recent rains will benefit their third cut this year.

“It’s not bad, but it’s still not great,” he said. “A lot of it is maybe a half a ton per acre or 50 per cent of kind of what they would normally expect with a second cut.”

First-cut yields were around 60 per cent or less of normal for those eastern producers, he said.

McGregor is concerned about fields that missed the window on the first cut while plants were still vegetative.

“Because of the dry conditions, a lot of producers didn’t or weren’t able to take that first cut and, if and when they did, a lot of those hayfields were very, very mature,” he said. “Once we get a mature field, it’s very difficult for it to come out of that dormancy, which is basically what it does when it starts to set seed and start to regrow again.”

The rain and warm temperatures do spell hope for a second cut, he said, but stressed that moisture must continue given that feed supplies are playing catch-up.

Heavy culls only need apply

Livestock operators may welcome their eligibility for tax relief, but only those culling heavily will benefit.

The federal livestock tax deferral requires producers to cull at least 15 per cent of their breeding herd to access the program.

Producers can defer up to 30 per cent of the sale if they are culling between 15 and 30 per cent of their breeding herd. Producers can only expect to defer most of their sale if they are moving more than that margin. A producer culling over 30 per cent of their breeding herd can defer up to 90 per cent of that sale.

The program is meant to delay the tax burden “until the next tax year when the income may be at least partially offset by the cost of reacquiring breeding animals,” AAFC says on its website.

Producers who already deferred income last year, only to be met with similarly dismal feed supplies in 2019, will not have to worry about that deferred tax burden this year.

The program allows producers to defer that income to the first year their region does not make the list, a nod to regions that may face back-to-back years of excess moisture or drought.

About the author


Alexis Stockford

Alexis Stockford is a journalist and photographer with the Manitoba Co-operator. She previously reported with the Morden Times and was news editor of  campus newspaper, The Omega, at Thompson Rivers University in Kamloops, BC. She grew up on a mixed farm near Miami, Man.



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