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Beef producers cautious about herd expansion proposal

Lack of profitability and uncertainty over where to market animals are two key challenges

Manitoba cattle producers aren’t against a government plan to substantially increase the province’s beef herd but have a lot of questions about how to get there.

Growing those numbers will require more producers, larger herds and more acres, according to Manitoba Beef Producers.

Exactly where those will come from isn’t clear, especially considering the cost of getting started in the business, said Heinz Reimer, MBP’s outgoing president.

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“Sometimes we hear, I’m a young guy. How do I get the money to get into something like that?” Reimer said during a break in MBP’s annual meeting last week.

Manitoba Agriculture Minister Ralph Eichler raised eyebrows last summer by calling for a 70 per cent increase in the province’s beef herd over the next 10 years.

Manitoba farms were home to 440,200 beef cows on January 1, 2016, according to Statistics Canada. Eichler wants that number increased to 750,000 by 2026.

Eichler did not propose a strategy to achieve that goal, leaving it up to the industry.

Manitoba Beef Producers met with Eichler and held a brainstorming session with producers and industry representatives to float ideas. MBP then took Eichler’s proposal to its 14 fall district meetings for discussion. It summarized producers’ comments in a January 26 letter to the minister.

Producers raised several main areas of concern when asked what it might take to realize the government’s goal. A big one was where all these cattle would be sold, MBP general manager Brian Lemon said.

“One of the things I heard at several districts was, it doesn’t do us any good to put more cattle on the ground if we don’t have a place to market them,” Lemon told the meeting.

“It’s about making sure this is really sustainable. It’s about really making sure whatever we do to grow the herd is part of a broader strategy to grow the herd and actually sell the herd.”

Lemon said some of the things producers say they need to expand herds include:

  • Better business risk management tools for the cattle sector.
  • Streamlined government regulations to encourage growth.
  • Improved access to Crown lands and community pastures.
  • More available land at a reasonable cost for raising cattle.
  • Improved water and wildlife management.
  • A strong beef value chain and greater market access.

Industry analysts say the problem isn’t finding room for 750,000 cows. The question is what to do with them.

Manitoba is primarily a cow-calf province with limited slaughter capacity. Although there is some backgrounding here, most animals go to feedlots in Alberta and the U.S. for finishing.

Market prices are down from a peak three years ago, putting another damper on herd expansion.

But Eichler said the strategy to grow Manitoba’s beef herd is doable because of the increasing world demand for meat.

“The demand for animal protein is expected to double by the year 2040 as the world population increases. Along with using our best science and engineering for value-added processing, the strategy will position Manitoba as a dependable, sustainable supplier of meat and plant-driven protein-based products,” he said in an address to the MBP meeting.

Later Eichler, a former cattle producer himself, said now is a good time to expand herds while markets are soft.

“My attitude is, now’s the best time to hold heifers back and breed them. Why sell them in a depressed market? I would say, breed and hold. I wouldn’t empty out the pen right now if I was a beef producer. I’d be holding some of those heifers back and breeding them for future growth.”

Eichler’s call to grow Manitoba’s beef herd sparked several resolutions during MBP’s business meeting. One called for the Manitoba Agricultural Services Corporation to expand its forage program. Another requested a more flexible transfer of Crown lands between producers. A third wanted sales of beef breeding herds exempted from a tax on capital gains.

Even though a 70 per cent increase in beef numbers is ambitious, Reimer said it’s good for producers to have a goal.

“I don’t know if it’s practical but I think we can do it. If you don’t have a goal to go forward, what’s your initiative?”

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