| |
Opportunities for Beef Production in Northern Alberta | |
| |
|
|
| |
|
|
| | The western Canadian beef industry is dynamic in terms of how it has adapted to change and evolved over time. Economic pressures have caused the evolution of the cow/calf segment regarding geographic location, land use and production practices employed. Some of the key economic elements driving this evolution, at the business unit level, include:
- unit production costs,
- farm financial performance,
- alternative production opportunities,
- real estate values, and
- growing knowledge of production technologies.
How producers perceive the interaction among these elements leads their choices regarding expansion of their existing businesses or re-location to a different region.
For many years, northern Alberta residents have considered the Peace River region as having many of the attributes conducive to cow/calf production. However, this potential does not appear to be generally recognized by producers in other regions or provinces....particularly those seeking a change of location to alleviate the economic pressures in their current location.
Alberta Agriculture's (AFRD) Northern Alberta Beef Industry Development Team, along with the Department's AgriProfit$ program staff, have compiled information on the relevant regional economic drivers to further the understanding of the production potential within the region. This will enable producers from within and outside the region to make better decisions regarding beef production opportunities in the Peace.
A Look at the "Facts"
AFRD's AgriProfit$ and Agricultural Real Estate Values databases are employed to provide a view of the cow/calf industry in the Peace. Similar Saskatchewan economic profiles, as posted by the Western Beef Development Center (Saskatoon), are provided to add further context. Occasional limited interpretation is provided. The onus is on the reader to draw their own conclusions.
Note to Reader: AgriProfit$ Cost and Returns information provided covers a short time span. The reader must consider the regional and year effects of drought over the course of this period.
A listing of definitions and explanations is attached to assist readers in interpreting a number of the terms utilized in the tables and discussions.
Regional Costing: Table 1 presents selected costing totals comparing Alberta regions, plus the Provincial Totals for both Alberta and Saskatchewan. The "top profit" averages, by region are included as well. With respect to the Peace, the comparative costing shows that producers managing to suit their production environment and maintain a low cost status are competitive with other regions.
Costs & Margins Over Time: In Table 2, total costs, returns over cash costs and cow/calf enterprise profitability are compared, by regional and performance groupings. The low unit cost approach of Peace Region program participants is shown as their source of profitability.
Forage & Grazing Economics: The success of cow/calf operations is closely tied to the ability to economically produce forage and grazing to support the business. Table 3 compares and contrasts productivity and costing of selected forage and grazing crops in the Peace Region relative to the provincial averages. Margins and productivity indicate the opportunity to strategically utilize these resources to achieve a "low cost" cow herd.
The Land Base: The land investment is a key element in any beef operation. Chart 1 presents average land values (per acre) for the Peace Region vs. comparable Alberta averages. CLI class 3, 4 & 5 values are uses as they are more typically associated with beef operations. Although land values are trending up over time, the Peace Region values consistently range from $150 to $200 per acre lower than the Alberta averages.
Summary
The commonly held negative perceptions of beef production opportunities in the Peace Region appear to be unfounded. The information provided herein should dispel some of the misconceptions regarding distance, productivity and profitability associated with cow/calf operations in the Peace. Strategic resource use, sound business management and a focus on low unit production costs have been shown to result in profitable cow/calf business ventures in Alberta's North.
|
|
| |
|
|
| |
For more information about the content of this document, contact Anatoliy Oginskyy.
This document is maintained by Shukun Guan.
This information published to the web on March 11, 2004.
Last Reviewed/Revised on March 28, 2018.
|
|