Statistics Canada says beef farms don’t earn money

Mar 27, 2024

ATHENS — Ontario beef producers don’t make money, according to the latest statistics. Statistics Canada reported that on average that last time an Ontario beef farm squeaked out a profit was in 2016 and the average profit was $2,600.

In 2022, the most recent year for which data is available, the average beef farm lost almost $9,586 after expenses and depreciation (on gross revenues of just over $370,000), StatCan reported.

And yet, the Beef Farmers of Ontario organization hasn’t closed its doors, beef remains a going agricultural concern in the province, and beef cattle continue to dot the rural Ontario landscape.
So what gives? It appears that smaller beef producers are dragging down the average.

Kim Sytsma, co-owner of a more substantial 300-head black and red Angus cow-calf operation in Athens, north of Brockville, says that raising beef is profitable for farmers with a good-sized herd. She and her husband, Charlie, and their son, Will, are partners. They rotationally graze their herd and produce between 225 to 250 calves annually. “We wouldn’t be here eating if we didn’t make money,” she told Farmers Forum. “We don’t go on big holidays or anything, but … it’s a good life.”

Sytsma has been a beef farmer since 1978.

Though profits are highly variable, she agreed that beef has only been a losing proposition during exceptional events that drove beef prices way down, such as the BSE crisis of the early 2000s. More recently, in 2019, processing plants backed up, which had the perverse effect of dropping farmers’ market price by 50 % while increasing the consumer price at the grocery store.

“Some years are a lot more profitable than other years,” Sytsma noted. “But we have survived some very dry years here. We have survived through BSE.”

She pointed out that the provincial beef herd is “actually shrinking” and for “People with small herds, it’s more and more difficult for them to make a living, just because the price of everything is so expensive.
“You need a really, really good off-farm job if you’re just going to keep a few cows. Just a small repair on a tractor is thousands of dollars.”

Bruce County’s Ken Schaus agrees. He’s partner in Schaus Land & Cattle Co Ltd., one of Ontario’s largest beef operations. “If we weren’t making money, I wouldn’t be here, long story short,” he said. “I could just cash crop … sell my grain.”

Some years were not difficult to turn a profit, he said. “When I look at 2022 and 2023, with the calf prices, the fed cattle prices and the feed costs, if you couldn’t make money (at beef) in those two years, you probably shouldn’t be in it.”

Referring to the StatCan report, Schaus pointed out that there is a small minority of farmers unable to make money in every sector, from poultry to hogs to dairy.

Contrary to the popular hobbyist image of beef farming, Schaus said he knows of several 500-head producers in Bruce County alone. “You start running 400 or 500 cows, producing calves that are worth $2,400 apiece this year, you can run a fairly sizable operation and it’s profitable,” he said.

A beef operation’s viability is influenced by land prices and land rental rates, Schaus added, and Bruce County and the Bruce Peninsula are still affordable for raising beef from the land without many off-farm inputs. “You can grow three cuts of hay, you can graze your corn stocks. There’s all kinds of things you can do. I know guys in this particular area, the only thing they purchase off farm for their entire calf production is the salt and the minerals and the vet supplies.”

With the abundant crops grown in Ontario and resulting “feed byproducts to no end” from various processors, the province is well placed to produce more beef, he said. Schaus also sees particular opportunity for the production of homegrown Ontario beef calves in Ontario. His own operation currently buys young animals from out west.

Sytsma agrees that there are opportunities out there for aspiring beef producers, “but you can’t build a herd on the premise that you’re going to be able to rent the next door neighbour’s farm forever,” she said. There’s still plenty of land good enough for grazing in the province, and putting up electric fences and water trough pumps on remote pastures “is not a big deal anymore” with portable solar panel technology, she pointed out.

Source : Farmersforum
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