Manitoba cattle farmers welcome good prices, say they fuel expansion hopes
New report shows livestock, commodity prices up year-over-year
The low Canadian dollar has some Manitoba cattle producers milking a bit more into their bank accounts and thinking they may expand their herds.
A recent report from Farm Credit Canada economists found cattle export prices are up in some cases by about 20 per cent year-over-year.
And it's not just cattle farmers reaping the benefits.
"If we look at the grain side in 2015, U.S. corn prices were about 10 per cent lower and in Ontario, corn prices are nearly four per cent higher in 2015 compared to 2014," said FCC economist Leigh Anderson.
He said that even though there were price declines year-over-year in some commodities, they are priced in U.S. dollars. Converted back into Canadian dollars, the prices actually rose.
"The loonie always provides support in commodity prices," Anderson added. "We saw this prior to the loonie climbing up to parity and now as the loonie has declined again we are seeing the Canadian prices having some support."
Anderson believes the weak dollar will bode well for producers heading into 2016.
Flip side of weak dollar
But the weak dollar isn't all good news.
Melinda German, president of Manitoba Beef Producers, says while a low dollar can lead to good prices for exporters on this side of the border, it also has its cons.
"It could add increased competition on the feeder [cattle] side where our Canadian feeders might have to bid more on cattle to keep them here [in Canada]," German said. "So there is good and bad in the industry when we see this happening."
More cattle are also staying here in Canada, she said, due to the country-of-origin labelling debate south of the border.
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German said across the board, even though prices are down they are still good compared to what they were ten years ago.
"Definitely what we are seeing in the industry is much more positive now than what it was several years ago," German said. "It is definitely down over last year which does create a bit of concern. But what we have heard all along this year was to expect a lot more volatility in prices."
Definitely what we are seeing in the industry is much more positive now than what it was several years ago.- Melinda German, Manitoba Beef Producers
German said trends have pointed to 2016 being a year that cattle farmers look to expand their herds instead of downsizing or selling everything off completely.
She is hopeful that Manitoba farmers will follow that trend.
Manitoba farmer in 'slow expansion' mode
At least one Manitoba farmer is already on the expansion bandwagon.
Dave Koslowsky and his wife have farmed near Killarney, Man. for the past several decades. They survived the BSE crisis and are now enjoying the good prices in the industry today.
"The past two years have been very good," he said. "The run-up in prices has been fantastic... overall it's been a very good thing."
"We're actually making a decent living at it now compared to what we were ten years ago at the height of the BSE crisis."
"We're actually making a decent living at it now compared to what we were ten years ago at the height of the BSE crisis." - Dave Koslowsky
Koslowsky said he contemplated leaving the industry at the height of the crisis but his wife encouraged him to keep at it.
And that encouragement appears to have paid off.
The prices and outlook on the industry now have Koslowsky in what he calls a 'slow expansion.'
"We've been doing a slow expansion every year," he said. "Nothing big, we keep a few of our replacements back and every year we have a few more."
Things are looking up for 2016, Koslowsky said. He's looking forward to a new batch of calves arriving in February and March.