The rent increases came last year as part of a list of changes to the Crown land allocation program. The province introduced a new rental formula, which tied rents to beef market prices and would be phased in over the next two years.
Producers saw rates jump from $2.13 per animal unit month to over $7 in 2020. The other half of the increase is set to come into effect in 2021.
The rental increases were among the issues that beef producers leasing Crown land have since raised with the province.
In an April 28 press release, NDP Agriculture Critic Diljeet Brar called for the rollback, as well as a deferral for any outstanding Crown land rents. Brar pointed to the market downturn facing the beef sector, following plant shutdowns and disruptions in Alberta.
“Beef producers were already stretched thin with declining prices and market concerns due to COVID-19,” Brar said.
Beef markets have experienced a backlog since the announced closure of the Cargill packing plant in High River, Alta., in mid-April. The Canadian Cattlemen’s Association (CCA) has also noted slowdowns at the major JBS packing plant in Brooks, Alta.
Together, the two plants make up 70 per cent of Canada’s beef capacity. In the second-last week of April, the CCA estimated that feedlots were losing up to $700 a head, while local feeders and backgrounders said that cattle movement had ground to a halt.
NDP Leader Wab Kinew had previously suggested suspending rent payments for Crown land in general.
“We heard so much over the past few months over all the changes to the Crown land lease program and, through that process, we just recognized that is a big cost that a lot of producers are worried about,” Kinew said at the time.
He added the increases are being contributed to the sector’s woes as the plants slow and shut.
Beef sector weighs in
The Manitoba Beef Producers says it had already argued that the rental formula transition period should be extended to five years prior to the pandemic.
“We have restated this position to the provincial government in recent weeks, particularly in light of the COVID-19 pandemic and the uncertainty it is creating,” general manager Carson Callum said. “As the situation continues to evolve it will be extremely important for the beef industry, governments and elected officials to be working collaboratively, revisiting all these types of programs and initiatives to determine where adjustments are needed, be this to rental rates, lending rates, business risk management programs and so on.”
The industry group has joined calls for a national set-aside program, similar to programs put in place during the BSE crisis to help sustain producers forced to hold on to cattle and match supply with slaughter capacity.
Business risk management has also made the Manitoba Beef Producers’ priority list, Callum said.
The provincial group, along with the CCA, is calling on governments to include the pandemic as a national disaster under AgriRecovery, enhance advance payments and eliminate the $3-million payment cap within AgriStability, among other changes.
When reached for comment, a representative from Manitoba Agriculture and Resource Development said they are “in contact with Manitoba Beef Producers and monitoring the Alberta Cargill plant closure and impact on the Manitoba cattle industry.”
Feeder and backgrounding operations have taken the heaviest financial hit from the shutdown so far, according to the beef sector, while cow-calf operators make up many grazing and forage Crown land leases in Manitoba.
Most cow-calf operations in the eastern Prairies will mostly be marketing in late 2020, CCA executive vice-president Dennis Laycraft noted in a call with media April 21, although he added that the shutdown has created considerable anxiety over long-term market impacts.
“The first impact is directly on cattle feeders,” he said. “They’re the ones who have the market-ready cattle, but that quickly then reflects back on what they are prepared to pay for feeder cattle, so we’re already seeing that impact reaching through both the fed and the feeder markets.”
Kinew maintained that suspending Crown land payments would help reduce anxiety in the sector in general.
“Every piece of news seems to create more anxiety and uncertainty,” he said.
Those concerns include getting products to market, through transportation, or processing facilities, both of which could be affected by the pandemic.
“I think the more the government can be proactive and just put in supports to let people know that there is financial assistance available, or on the way, the more that I think that’s going to have a calming effect,” he said.
The NDP has also asked the province to provide webinars and training on social distancing rules leading up to the seeding season, bolster local direct-marketing supply chains, and to introduce $100,000 interest-free loans for agricultural inputs.