As beef prices rise, P.E.I. farmers eye expansion
Price assurance could protect producers from losses during expensive expansion stage
P.E.I. cattle producers were happy to hear their industry being discussed in the legislature last week.
Producers' chair Dennis Hogan told Island Morning host Laura Chapin that over the last 10 years, the number of cattle on the Island has dropped from around 12,000 to 8,000 animals, with higher production costs cutting into profits.
Some farmers have found it more profitable to grow crops using pasture land rather than putting cattle on it. With the profit running about $200 per animal, it's not easy to make a living just raising cattle on P.E.I., said Hogan.
But now is a good time for farmers to look at expanding their herds, Liberal MLA Robert Henderson said in the legislature last week.
"Beef prices are going up, and that's a great thing," said Henderson.
"But if you want more farmers to invest in buying more cattle and putting them out in our pastures and incorporating manures into our soil, you're going to have to take the risk out of this for farmers."
Henderson said the way forward is for the provincial government to introduce a price assurance program, something other provinces have already done.
Agriculture Minister Bloyce Thompson said he is working on doing that with the federal government and the Maritime Beef Council.
There is interest in expansion, said Hogan. A recent survey of members showed 56 per cent would like to grow, but cost is a significant barrier.
"You buy a cow today, you pay a lot of money for it, and then in a year you go to sell it and the market's dropped significantly, and then you lose money on that animal," said Hogan.
"But if you buy price insurance, it will protect you against the market."
Another barrier to expansion is the shrinking availability of land, which in recent years has been in high demand for development. And, as in many other industries, Hogan said, there is a labour shortage.
With files from Laura Chapin