Rod Nickel

WINNIPEG (Reuters) – Canadian farmers are in danger of running out feed for their cattle due to the severe drought that hit last summer, which caused damage to crops and made it difficult to transport them.

Drought has decimated Prairie pastures, and feedlots in Alberta (the main province that produces cattle) have been forced to purchase more U.S. Corn. It is expensive and difficult to move it north.

Canadian Pacific Railway Ltd., Canada’s main grain shipper, is struggling to meet demand in frigid conditions. The supply chain could be further disrupted by the introduction of COVID-19 mandates to cross-border truckers.

According to Brian Perillat (an analyst for CanFax), the feed shortage may affect profits at feedlots. However, it will not increase retail beef prices because feedlots are motivated to sell their cattle as soon as they can to packers, increasing supply.

Jacob Bueckert is the owner of a feedlot with 20,000 head near Warner in Alberta. He estimates that he can keep five days worth of feed, whereas he usually has between 14 and 30 days.

We don’t have any buffer. “It’s frightening,” he stated, noting that he was frustrated at delayed rail shipping.

“Excuses won’t feed the cows.”

Bueckert stated that many feedlot owners can survive on donations from their neighbors, who often have sufficient feed. He said that it can be difficult to locate surplus grain as feedlots become more full after last year’s drought, which led to ranchers selling more cattle for feedlots.

Janice Tranberg (chief executive, Alberta Cattle Feeders’ Association) said that if packing plants are full, feedlots might ration scarce resources over a longer time period. This may delay cattle reaching slaughter weight and adds cost. Three-quarters of province’s feedlots that fatten 1.5 million heads, are facing shortages according to Tranberg.

Canada ranks eighth in the list of top veal and beef exporters. America is No. America is No. However, there was a 6% increase in the number cattle that were placed in U.S. feeders in December than a year ago. This is despite drought-related pasture drying.

According to data from the U.S. Department of Agriculture, U.S. corn exports to Canada reached 1.085million tonnes between Sept. 1, and Jan. 13, almost six times more than the average five-year figure. Some 2.1million tonnes were sold but have not been shipped.

Marie-Claude Bibeau, Canadian Agriculture Minister, stated on Twitter (NYSE 🙂 that the shortage of feeds was raised with Canadian Pacific on Saturday.

CP stated that it will continue to supply feed to feedlots despite difficulties, however it didn’t say if it would take further steps.

According to a company executive, CP shipped 8,100 wagons worth of U.S. corn last year into Alberta, which was 13 times more than the volume from last year. Another feed product that saw a jump in shipment was distillers dried grains.

Cam Dahl, the general manager for farmer group Manitoba Pork, stated that hog farmers are concerned about their feed shortages. Some truck shipments to U.S. soybean meals have already been cancelled. According to Cam Dahl, the reason for the cancellations was due to vaccine mandates that reduce the number of drivers.