Alberta ranchers are being urged not to over-react after word a major feedlot operator is suspending operations at three locations in the province.
Western Feedlots has announced a voluntary wind down of operations in Strathmore, Mossleigh and High River high risk/low return environment and the poor political and economic prospects in Alberta.
Alberta Beef Producers executive director Rich Smith tells Global News this is only one business that’s made a decision and there are other feedlot operations, but it’s not a good sign. “It’s worrisome when a significant business in our sector suspends their operations citing high risk and low returns. So it makes us concerned.” Smith says there is a significant number of other operations in the province so “at this stage, we’re telling people you can’t make big decisions based on what one business has decided.”
Cattle prices have come down significantly from last year when there was a shortage of beef, pork and poultry. Smith says that “shortage of protein” no longer exists, but beef demand is still strong and despite the correction prices are still relatively good compared to historical prices.
The Western Feedlots decision will hurt grain producers who grow feed and others. Smith says “This affects our whole agriculture sector. Cattle feeding is a very important part of the agriculture industry in Alberta, and the whole economy of the province. When you see a concerning development such as a major business suspending their operations it does make everybody a little bit worried.”
Smith expects cattle prices to increase over time as long as supply in the grocery stores remains high.