Western Feedlots is shutting down in the face of low prices and what it calls a poor economic environment. The 58-year-old feedlot announced Sept.
Western Feedlots is shutting down in the face of low prices and what it calls a poor economic environment.
The 58-year-old feedlot announced Sept. 21 it will wind down feeding operations and cattle ownership at its High River, Mossleigh and Strathmore-area locations.
The company declined an interview request, but in an emailed statement said the focus is now helping employees with the transition.
“Western Feedlots Ltd.'s shareholders have made a conscious decision to voluntarily wind down operations,” the statement read. “Although we understand the interest that this announcement generates, we are taking this time to focus on our employees, assisting them in any needs they have to more forward and relocate to other employment. We would like to thank them, as well as our suppliers and customers for their support and dedication for the last 58 years.”
According to a statement on the company's website, shareholders made the decision to close the feedlot due to a high risk/low return environment in cattle ownership, as well as “strong headwinds in the cattle industry, the poor political and economic environment in Alberta are also contributing factors to this decision.”
Western will continue to feed and market its cattle and operations will cease once its existing supply is exhausted. It will not hire new employees, or purchase grain or feeder cattle after that point, but it will continue with farming operations for the foreseeable future.
Foothills rancher Ralph Nelson said the move will leave a mark on the community. He said he has sold cattle to Western Feedlots in the past and it's an important local market for cattle and grain farmers.
“It's going to be pretty big hit for the community as far as the grain industry, barley growers, and they were a great corporate citizen too,” said Nelson.
He said it will likely trickle down through other businesses such as cattle liners and grain haulers.
While Western Feedlots is closing, Nelson said there are still other places for producers to sell or go to for feed services.
“There's lots of feedlot space, the fact that Western's gone is not the end of the world for the feeding industry because there's pen space,” he said.
Ultimately, Nelson questioned the long-term future of the feedlot as High River continues to grow.
“In time and over the next quite a few years, I think it's cycle was probably limited,” he said. “As the town keeps growing closer there would be more conflict.”
Rich Smith, Alberta Beef Producers executive director, said Western Feedlots is a large operation, but there is still plenty of capacity in others across Alberta.
However, he wonders what the closure could means for the feeding industry in Alberta because they are all facing the same tough economic conditions.
“It's worrisome to have a significant business – and Western certainly is a significant business and certainly one of our iconic feedlots in Alberta that's been in business a long time – it's worrisome when they make a decision to suspend operations and talk about high risk and low return situations,” said Smith.
He also said the closure move impacts the Foothills.
“For people in your area it's a close market for cattle, I'm sure they buy significant amount of grain from your area, people in your area I know were able to use the manure from the feedlot, so It certainly has a significant impact in your specific area,” said Smith.
It's been a hard year for cattle feeders as prices have dropped from record highs just one year ago, he said.
“For a lot of cattle feeders, they purchased cattle late last year when prices were still pretty high and the prices on finished cattle just continued to go down through the winter, spring and summer,” he said.
Prices aren't bad, but the sudden drop has rippled across the industry, said Smith.
He said a rare shortage of all three major proteins – beef, pork and poultry – across North America drove up prices last year. However, higher production of pork and poultry in the U.S. and a significant expansion of the cattle herd has driven prices down.
“The percentage drop is exaggerated because the prices were sort of exaggerated at the peak,” said Smith.
