Coming out of the Beef Farmers of Ontario’s annual general meeting this spring, president Bob Gordanier was reminded of the saying, “Opportunity never arrives. It’s here!”
BFO’s northern cow herd expansion project presents an opportunity for beef farmers unlike any since the settlement years with the prospect of opening up provincial Crown land in the “great Clay Belt” of northern Ontario for beef production.
The Clay Belt in the Cochrane District isn’t uncharted territory, surrounded by communities such as Timmins (700 km north of Toronto), up to Cochrane, Kapuskasing and Hearst along the northern route of the Trans-Canada Highway. But it could be the last frontier for affordable land and ample access to water for beef production, encompassing 16 million acres of parkland-like terrain with some open land already used for agriculture, bush, swamp and forest.
To put the opportunity into perspective, 13 million acres in all of Ontario are currently used for agriculture.
The proposed beef herd expansion would require about five per cent of the 16 million acres released little by little as beef farmers buy in. The project aims to develop a premium northern beef system capable of expanding the provincial cow herd by 100,000 head with the addition of 30 economically viable (requires 2,500 acres) farms per year over the next 20 years.
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A feasibility study done for the BFO shows beef expansion of this magnitude is doable and economically viable for families in the long term with affordable access to Crown land. The expansion would generate more than $3 billion in economic activity for northern communities while bolstering the supply of cattle to retain processing capacity and sustain the beef industry in Ontario.
Premier Kathleen Wynne gave the concept a nod of approval in her mandate to the Ontario Ministry of Agriculture and Rural Affairs (OMAFRA) last fall. Now, with an agreement on the broad vision in place, work begins on implementation.
“This isn’t going to happen overnight and we won’t have details for a while,” Gordanier says.
“The key is release of the Crown land. Say, for example a family purchases 500 acres of land bordered by Crown land, there would be an opportunity to expand by buying or leasing the Crown land. We are trying to get a pilot project and are very open to ideas and open to what should be in the stipulations.”
Gordanier likens the government’s release of land for agriculture to creating an “agricultural preserve for the future of food production” considering seven million acres of land used for agricultural production in 1965 now sit under housing and industrial developments.
It’s not unusual for land in southern Ontario to sell for $10,000 per acre and upwards of $20,000 per acre in some districts. “Young farmers can’t afford to pay those prices and the current size of beef operations won’t support two or three families to bring the next generation in.
“Someone has to move on,” Gordanier says.
BFO is also looking at the feasibility of expanding beef production in Ontario with alternative strategies for feeding Holstein calves. Directors have twice visited the U.K. to gather information on a Holstein feeder value chain and assess its potential for Ontario.
BFO’s Farm-to-City business model for producers who want to sell directly to consumers will roll out as a pilot project this spring with Toronto as the target market and VG Meats as the first participant. When complete, the model and website for online ordering and payment, will be suitable for direct sales of other agricultural commodities, and to consumers in other urban centres.
These initiatives stem from strategic planning sessions in 2012 when directors tackled the challenge of reversing the decline in the provincial herd, which has fallen from 410,000 to 289,300 head over the past decade.
Several resolutions at the BFO meeting dealt with helping producers maintain the current level of production and participate in expansion efforts.
Delegates had one concern with the expansion plan in that they asked BFO to ensure producers in the rest of Ontario be offered the same programs and incentives as those in the north.
There is full support for BFO’s efforts to raise the loan limits and funding for the provincial feeder cattle loan guarantee and beef breeder co-operatives.
Currently there are 18 feeder co-ops operating in Ontario serving the credit needs of more than 900 farmers plus eight breeder co-ops with nearly 300 members, 60 more than last year.
BFO is arguing for a guaranteed loan limit of $500,000 per member from the $250,000 set back in 2006. Back then the average value of feeder cattle financed through the program was $800. Last year it was $1,600, effectively cutting the number of cattle a producer could finance in half.
To make the change the province would have to raise the guaranteed loan limit to $250 million from $130 million today.
The risks are higher for all concerned but, as the BFO often reminds the province, no co-op has ever drawn on the guarantee in the 24-year history of the feeder program or the 13 years of the breeder program.
BFO delegates would like to see both programs brought under one roof so that co-ops could achieve greater economies of scale by offering both options, while trimming administrative costs. They also recommend implementing a third-party review of an individual’s ability to pay when applying for new loans.
The annual report and resolutions from the annual meeting are available at ontariobeef.com.