GrainsWest Fall 2020

Fall 2020 grainswest.com 25 What are feedlot owners saying? Over the summer, GrainsWest heard three unique points of view as to how business was progressing in their yards and what they expect over the coming months. Curtis Vander Heyden Director of operations and cattle sales, Grandview Cattle Feeders, Picture Butte A positive mindset goes a long way these days, especially when you operate three feedyards and have a crew of 65 with varying levels of comfort around coronavirus. Grandview’s management has worked hard to quell fear and keep operations running the same as always while being cautious. Vander Heyden knows the virus could rip through his workforce and has taken every precaution he can, including the development of an action plan. The business has simply been “managing” and Vander Heyden said predicting markets is almost impossible day to day. “Markets, commodity futures, Canadian dollar, or what was happening with COVID, packing plants being shut down, you’d have the feeling that the cash market is somewhat softening … yet it might soften for a couple days and turn around for no apparent reason.” The company is exercising prudence with how open they are to operational changes such as expansion, and he said Grandview has talked about protecting the business through an insurance plan given market vagary. “We haven’t been able to move a lot of numbers … the losses aren’t quite there right now, but to replace some of these cattle, you’re replacing them with a negative margin in them right now,” he said. “So, to offset—going straight off what the futures market is and what we’re forecasting our feedstuffs to be—it doesn’t work very well.” He is currently replacing animals at a rate of about 10 per cent. “The losses we’re sustaining right now, with such a deflated feeder market, there’s really no incentive to buy anything that comes on the market today,” he said. “There’s no appetite to take on that risk anymore.” Karleen Clark Owner and business manager, KCL Cattle Co., Coaldale Favour was on the side of KCL at the start of spring, even with backups from local packers, thanks to timely deals. “We had cattle contracted in April. Once the packers were able to be accepting, we at KCL were pretty lucky,” said Clark. “We got some cattle shipped in early May. It was a huge reduction and still very much limited, but we have had a few cattle going.” She said KCL’s management is working hard to stay on top of hedging, the Canadian dollar and grain prices to help keep the books balanced through fall and winter. With the frenetic nature of the market right now, she and others have had to be agile in order to capitalize on transactions. “It’s been very day by day for the last two months,” she said of May and June business. “The packers will call and say, ‘we have this offer, do you have cattle?’ Usually, though, we schedule numbers a few weeks ahead. That’s been a challenge.” Their buying had gone up a small amount, but slowed overall in the spring simply because they did not have enough capacity in the yards. The company’s next few months starting in mid-July were strictly routine with no planned expansions or contractions, and Clark admits they would keep an eye out for beneficial business opportunities. With recent pandemic problems, Clark is hopeful that this event has a silver lining that would cause the federal government to see the need to reform its aid programs for primary agriculture. “Going forward, to help mitigate the effects of COVID, our BRM [business risk management] programs really need revamping,” she said, specifically noting the AgriStability package.