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FCC figures show cattle industry struggling
Theresa Seraphim
for Spotlight
The cattle industry is still in somewhat dire straits, Farm Credit Corporation staff told those present at an educational session during the Peace Country Beef Congress.
“We’re experiencing decline in almost all sectors,” said Craig Klemmer.
“There’s been a strong decline in cattle since 2005.”
Klemmer and Jason Baker were at the congress to give a report on the state of the industry and to let producers know about FCC products.
Kelmmer said of the beef produced in canada, 48 per cent is used domestically (Canadians eat 32.2 kilograms of beef per capita per year), while 39 per cent is exported to the United States and 5 per cent exported elsewhere.
The export picture shows the U.S. gets 277 million kilograms, Mexico gets 38 million, Hong Kong receives 13 million and the rest of the world obtains 60 million.
In 2009, between January and October, 932,000 head were exported to the U.S. In 2008, a total of 1.53 million head were exported to that country.
“Right now, exports are down about 25 per cent in total compared to 2000,” said Kiemmer.
That, he said is due to the BSE situation and other factors – including the exchange rate, which is influenced by the dollar.
“It’s really important to look at the exchange rate and how it affects your operation,” Klemmer told the audience.
Demand for cattle is down, and the current state of the eocnomy plays a role, he said.
“People used to eat steak; now they’re eating hamburger,” said Klemmer.
But, despite that decline (which is global), the news is not all bad, he said. The economy will recover, and the industry will follow suit.
“There’s going to be a lot of people going out and spending,” said Klemmer.
He cited as an example the Consumer Price Index, which increased one per cent in November.
“We’re seeing companies hiring back people, investing in products and growing their inventory.”
Baker said the FCC’s beef portfolio has grown by 14 per cent and is still strong in cattle.
Loan decisions are not made by lumping producers together.
“Each one (decision) is individual,” said Baker.
A loan officer will look at the producer’s application using five C’s: cash flow, capital, collateral, conditions and character.
“The next thing is how you’ve operated in the past,” which forms part of the character assessment, said Baker.
Producers can get lots of help from FCC, he said.
“We do have a lot of different programs.”
These include Livestock Alliances, a Feeder Cattle Program and a Breeding Livestock Program.
“(The latter) is good for guys trying to start a herd,” said Baker.
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Jason Baker, above, is a relationship manager and loans officer for Farm Credit Canada’s Grande Prairie office. He discussed policies and procedures for qualifying for loans.
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Craig Klemmer, a portfolio analyst and agricultural economist, made a presentation about the state of the Canadian livestock industry and the trends Farm Credit Canada sees ahead.
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