By Jen Skerritt, Bloomberg
Gray clouds gather near Greg Bowie’s Alberta ranch, but not a raindrop in sight.
Bowie’s 350-acre pasture is so thirsty that it hasn’t grown enough to feed his 100 cattle. He spent C$3,600 ($2,892) in May to truck in hay.
“It basically doubles your cost on every animal every day,” Bowie, chairman of Alberta Beef Producers, said from his ranch near Ponoka. “The pasture and the hay land need considerably more moisture this time of year and we just haven’t had it.”
Dry conditions have worsened in pockets of Canada’s cattle country, with some areas receiving less than 40 percent of normal rainfall, according to Agriculture and Agri-Food Canada. Livestock producers are bringing in extra hay as forage and some are considering selling animals to reduce costs, said Fred Hays, policy analyst at the Calgary-based beef-producers organization, an industry group that represents 20,000 ranchers.
The dry spell is the latest setback for Canada’s cattle industry, which has declined in the past decade following mad cow disease, floods and labor shortages. The herd in Canada, the world’s eighth-largest beef exporter, is the smallest in 22 years.
“They don’t have the pastures that they need,” Hays said. “It’s getting more and more serious.”
While dry spring weather helped some farmers get an early start on planting, below-normal rainfall has kept pastures from turning green and producing feed, said Trevor Hadwen, agroclimate specialist with Agriculture and Agri-Food Canada. Parts of Saskatchewan and Alberta, Canada’s largest cattle producer, have not received rain for as long as 31 days and one area of eastern Alberta has seen record dryness since April 1, he said. Dry conditions also hampered canola seeding in parts of the Prairies.
May is typically a wet month and the area is “getting close” to a drought, Hadwen said. Lack of moisture is also raising concern about grass fires, he said.concern about grass fires, he said.
There were 39 wildfires burning in Alberta as of June 5, including two that were out of control, the province said.
“Drought is a progressive, slow onset, kind of a creeping disaster,” Hadwen said. “We’re certainly going down that path.”
The situation is a contrast to the U.S., the world’s largest beef producer, where the wettest May on record has boosted pasture conditions in Texas and is prompting ranchers to expand their herds. Drought conditions that shrunk herds to the smallest since 1952 are easing and the U.S. Department of Agriculture forecasts domestic beef output will halt its four- year slide in 2015 and increase next year.
Continued dry weather and lack of rain is starting to affect crops in many areas of Alberta, the province’s agriculture ministry said in a May 29 report. Surface soil moisture declined 24 percent from a week earlier and hay and pasture growth is slow due to cool nights and dry conditions, according to the report.
Canadian ranchers held 11.9 million cattle as of January 1, the fewest since 1993, government data show. Slaughter and exports rose in 2014 as record high beef prices offered farmers an incentive to move their animals, Statistics Canada said in a March 5 report.
If dry weather continues into June, producers may start sending cattle to be processed in the U.S., said Brian Perillat, a senior analyst at Calgary-based Canfax, a livestock industry researcher. Prices won’t increase as U.S. ranchers are expanding their herds and will be able to absorb cattle coming from Canada, he said.
Insurance programs don’t cover the cost of trucking in feed and the price of hay will probably rise as much as C$30 per bale, almost double the current price, if demand for forage increases, Hays said. It can cost producers “tens of thousands” of dollars to bring in forage for cattle, depending on the size of the herd, he said.
“There’s quite an expense there,” Hays said. “That’s when producers might start thinking it’s time to start liquidating.”
Bowie normally puts his cattle out to graze on pasture land in mid-May and estimates he’s already two weeks behind.
“If we don’t get any moisture we might as well graze what’s there,” Bowie said. “The longer it stays dry the higher the costs go.”