Ontario is producing more cattle and hogs than it has home-grown corn to feed them, making those sectors uncompetitive on a cost basis, the George Morris Centre observes in a new report.
The Guelph-based ag think tank on Thursday released a new report that warns those Ontario livestock sectors may be headed for “harsh adjustments,” meaning substantially reduced marketings, to get the red meat segment back on a cost-competitive footing.
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“It’s hard to have an export-based industry when we are importing corn from the U.S., exporting livestock and meat back to the U.S., and effectively paying the freight both ways using the same production technology,” said Al Mussell, a senior research associate at the centre and co-author of the report.
Mussell and co-authors Graeme Hedley and Anatoliy Oginskyy observed the increased use of grain corn as market weights of livestock increased, hog marketings increased and the nature of cattle marketings “transitioned.”
“As the cattle industry shifted to larger European breeds, cattle finishing rations shifted away from feeding corn silage to feeding grain corn. Even with lower marketings, the effective grain corn consumption in Ontario cattle feeding has very likely increased,” Hedley said in a release Thursday.
Once Ontario’s corn requirements for food, industrial use and supply-managed livestock are accounted for, “the apparent availability of corn produced in Ontario falls well below the implied demand from cattle and hog feeding,” the report noted, calling the shortfall “ominous” for the livestock sectors.
Based on the 2007 cattle and hog slaughter, the report suggests that reduced marketings of about 1.4 million hogs, or about 150,000 head of slaughter cattle, or some combination of the two, are needed to erase the corn deficit — or “much more” corn must be supplied to satisfy competing demands in the province.
“With ethanol developments poised to tie up much more of Ontario corn production than they already do, we need to recognize the threat,” Mussell said. “We wouldn’t have a red meat industry in Ontario if we didn’t have efficient corn production to feed it. This is a structural issue that is coming home to roost.”
