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Sale Results To Make A Rancher Smile

Co-operator staff / brandon

Up in the bleachers near the back at Heartland Auction Services, Garry McDougall looks toward the ring, stops in mid-sentence, and bends an ear towards the auctioneer.

Four of them are mine, he said, with a grin. Now you ll see if I get a smile on my face.

The Brandon-area mixed farmer s February-born black baldie calves had just come into the ring, part of a larger group of 700-pound calves at the presort sale Sept. 25 that saw over 1,500 head sold.

He was eager for some cheerful news and some cash flow after only getting about 15 per cent of his crop in this spring, and he ended up getting it.

At $1.31 per pound, that bunch of McDougall s 35 calves in the sale fetched a handsome price of well over $950 each.

It s a lot better than last year, he said.

Michael Buchen, a MAFRI cattle market analyst, who was also at the sale, described calf prices so far in this year s fall run as excellent mainly due to a shortage of cattle on both sides of the border.

It s pretty simple. Two words: supply and demand, he said.

Buchen noted that a 29-head lot of five-weight steers that just passed through the ring had brought $1.62 per pound.

The economy is holding us back. Could you imagine if we had a robust economy? he said. I think we re at the top of the market.

Given the time required for ranchers to retain heifers and eventually increase cattle numbers, Buchen said that high prices were likely to continue for two or three years at least.

That s because barriers for new entrants are high; bred heifers are currently worth around $1,200 each, and corn at $5-$7. Local feed mill staff said that many farmers who managed to harvest a crop this fall appear to be holding out for $5 per bushel or higher for barley.

Brian Vassert, a grain farmer from Rock Lake who keeps 20 head of cattle, was also up in the bleachers.

He was interested to see where prices would be this fall, but hadn t crunched the numbers on his cost of production.

Either way, he planned to keep his herd, both as a sideline and to graze some hilly, marginal land that he owns.

I don t look at that, he said. The land is just growing wild, so I put cattle on it.

Don Van Heyst, 78, who used to operate a 300-head backgrounding lot in Forrest in the 1970s, was at the sale with a friend.

Even with the relatively high prices, given the cost of fuel, land and equipment, Van Heyst, a former Manitoba Cattle Producers Association director, figured that the cattle business was still stuck in the realm of break even, not true profitability.

He quit the cattle business during the farm crisis of the early 1980s, after paying 22 per cent interest on an operating loan of $250,000, and later went into real estate.

That was a killer, he said. A lot of guys went broke.

At the time, the bankers put enormous pressure on farmers and ranchers to sell out and pay back their loans. If interest rates soar again, Van Heyst was optimistic that they might be more willing to work with borrowers, because the heavy-handed tactics they used back then backfired.

By dumping too many foreclosed properties on the market, they lost more money from lower asset values than if they had tried to negotiate with indebted farmers.

Brandon-area rancher James Reid, who two years ago sold his dairy quota and bought a 150-head cattle herd, said that even with the improvement in prices lately, retailers and packers are still skimming too much off the top.

Cow prices are good at the moment, but they are still a long way off from where they should be with the prices things are at, said Reid. You go out and try to replace a baler today it s $50,000.

In his area, land recently sold for $2,000 per acre, a price he figures will never allow the buyer to recoup his investment.

After 20 years in the dairy business, Reid, formerly from Northern Ireland, was still torn between the guaranteed returns of owning quota, and the greater freedom of ranching beef cattle.

Dairy farming is like being in prison, except there s no bars on the windows, he joked.

Nobody in their right frame of mind would work as hard as a farmer, and for such meagre returns, he added.

It s probably the biggest gamble you could ever do, being a farmer, said Reid.

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It s a lot betterthan last year.

Garry McDougall

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It s pretty simple.Two words: supplyand demand.

MICHAEL BUCHEN

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