The announcement that Western Feedlots Ltd. will be winding down its cattle ownership and cattle feeding operations is bad news for producers in Mountain View County and elsewhere in the province, says local Alberta Beef Producers (ABP) director Kevin Krebs.
A rancher and farmer in the Didsbury area, Krebs says the closure of Western's operations in the High River, Mossleigh and Strathmore areas will negatively impact operations here.
“Having one big player out of the game hurts,” Krebs told the Gazette. “I think it will negatively affect the price of barley, and the same with calves.
“Many of us involved in cattle feeding know it's always been a bumpy ride. They (Western) were losing upwards of $500 a head feeding cattle, so it doesn't take a mathematician to figure out that when you are at 100,000 head what the loss is.
“The price of finished cattle has dropped so much. We didn't see that coming down as quickly as it did. The price at the farm gate has definitely dropped.”
In a press release on Sept. 21, Western announced that it was suspending feedlot operations, and will no longer be purchasing feed grain or feeder cattle. “Western's shareholders chose this course of action due to the current high risk/low return environment in cattle ownership, which is inconsistent with shareholder objectives,” the company said.
“In addition to strong headwinds in the cattle industry, the poor political and economic environment in Alberta are also contributing factors in this decision.”
A lot of the barley grown in the county has been going to Western, said Krebs, who is one of the ASB directors in Zone 3.
“It's hard to say, but I'd say at least 50 per cent of this would go down there,” said Krebs. “Talking to local farmers, I know that was the only place they sold to for a long time.
“A lot of these local farmers I know, including ourselves, have sold (barley) to Western over the last 15 to 18 years. It's been directly to Western; we don't go through a broker or anything. It's been on-farm pickup and they've been a really good organization to deal with. They are very stand-up, from my personal experience.
“It's convenient because you don't have to go through a broker and they have they own trucks so you don't have to haul it there.”
The closure will also impact calves in the area, he said.
“It will be a trickle down on the calves as well,” he said. “With seventy to one hundred thousand calves, they (Western) had buyers at local markets, including at Olds, to buy calves. And now that won't be any more either.”
Asked if he believes there will be a way to make up the loss, he said, “A few feedlots might add a few pens to their lots, and with our low dollar the Americans might swallow that up too. I don't know if they will take the barley but they will buy calves. It's not a for-sure thing, but I think they would.
“You might see some guys try to grow a little more wheat, but for the most part west of Didsbury and Olds we are kind of barley country. That's what suits this kind of climate and topography.
“There are other guys that buy it (barley) so it will be a case of trying to locate new buyers for it.”
Krebs runs a mixed farm operation, with about 260 cow-calf pairs and sells barley and hay.
The Opposition Wildrose Party says the NDP government should be taking a lot of the blame for Western's Feedlots decision to wind down cattle ownership and feeding operations.
In a joint press release, Wildrose MLAs Derek Fildebrandt, Wayne Anderson, Dave Schneider and Rick Strankman said the following:
“Unquestioning adherence to their ideology has blinded the NDP government to the fact that while government can do little to directly improve the economy, it has a great capacity to harm it. This is as true in the agriculture industry as it is in oil and gas.”
Alberta Agriculture Minister Oneil Carlier reportedly said the government is prepared to support the feedlot industry.
“I am absolutely willing to talk to feeder associations as well as individual feedlots to see what more we can do to support the industry,” said Carlier.
“Ten years ago it was really tough times, and the beef industry has continued in Alberta. And I'm sure it still will.”
Alberta Beef Producers represents 20,000 beef cattle producers.
"You might see some guys try to grow a little more wheat, but for the most part west of Didsbury and Olds we are kind of barley country. That's what suits this kind of climate and topography." Kevin Krebslocal Alberta Beef Producers director
