ELMWOOD —Ontario beef producers don’t make money, or at least that’s what Statistics Canada says. StatCan recently reported that the average Ontario beef farm last squeaked out a profit in 2016, and then only reported net revenue of $2,600. In 2022, the most recent year for which data is available, the average beef farm lost almost $9,586 after expenses and depreciation on average gross revenues of $370,000, according to StatCan.
And yet, the Beef Farmers of Ontario organization hasn’t closed its doors, beef remains a going agricultural concern and beef cattle continue to dot the rural Ontario landscape.
So what gives? It appears that smaller beef producers are dragging down the average.
Ken Schaus of Elmwood, co-owner of one of Ontario’s largest beef farms, says that raising beef is profitable for the Schaus Land & Cattle Co Ltd. “It’s all we do,” said Schaus, who joined the family business in 1984.
“If we weren’t making money, I wouldn’t be here, long story short,” he said. “I could just cash crop, sell my grain.”
In fact, the last two years have been good for beef, said Schaus, who declined to say how many animals were on his farm. “When I look at 2022 and 2023, with the calf prices, the fed cattle prices and the feed costs, if you couldn’t make money (at beef) in those two years, you probably shouldn’t be in it.”
In his case, beef has only been a losing proposition during exceptional events that drove beef prices down. The BSE crisis of the early 2000s is a prime example. More recently, in 2019, processing plants backed up, which had the perverse effect of dropping farmers’ market price by 50 % while increasing the consumer price at the grocery store.
There is a small minority of farmers unable to make money in every sector, from poultry to hogs to dairy, Schaus pointed out..
Contrary to the popular near-hobbyist image of beef farming in Ontario, Schaus said he knows of several 500-head producers in Bruce County where he operates. “You start running 400 or 500 cows, producing calves that are worth $2,400 a piece this year, you can run a fairly sizable operation and it’s profitable.”
A beef operation’s viability is influenced by land prices and land rental rates, added Schaus, and Bruce County and the Bruce Peninsula are still affordable for raising beef from the land without many off-farm inputs. “You can grow three cuts of hay, you can graze your corn stalks. There’s all kinds of things you can do,” he said. “I know guys in this particular area, the only thing they purchase off farm for their entire calf production is the salt and the minerals and the vet supplies.”
With the abundant crops grown in Ontario and resulting “feed byproducts to no end” from various processors, the province is well placed to produce more beef, he said. Schaus also sees particular opportunity for the production of homegrown Ontario beef calves in Ontario. His own operation currently buys young animals from Western Canada.
Source : Farmersforum