ATHENS — Beef farmers who survived the five-year post-BSE lock out of American markets were welcomed with a new headache last year: a U.S. economy that hit a credit wall and sent input prices into record territory.

While the economic fall out continues and until input prices drop significantly, more Ontario beef farmers are expected to exit the industry. In fact, 13 beef farmers in Peterborough County shut down in the last six months of 2008. What all of this means is that the situation now is worse than during the post-BSE lockout, says Ontario Cattlemen’s Association director Kim Sytsma, who is an Athens beef farmer, north of Brockville.

"During the BSE crisis people re-mortgaged to make it through and now they haven’t got that option," Sytsma said. "And the banks have told a lot of the feedlots last fall.’ You will not fill up with cattle. You will sell corn.’ So we lost some feedlots and because producers had to re-finance they don’t have that option anymore. They lost their equity and their margin money."

She added that during the BSE crisis that began in May 2003, "the province and the federal government stood behind us and helped us out." But this time, the federal government has offered emergency advanced loans. "But do we really need more debt?" she asked. "It was appreciated for those who used it but the federal government wants to know why there wasn’t more uptake on it. First, it was a loan and guys wanted to know how would I pay this back?"

This new cash crisis has been caused by a combination of factors, she said, including "the newly implemented processing regulations, the government’s ethanol industry, the volatile Canadian dollar, lack of access to key markets and high input costs. It’s forcing a lot of producers to question the future in the beef industry."

There is already a declining number of cattle on feed, which means fewer buyers for cow-calf operators and with a likely decrease in packers bidding up cattle, 2009 looks like another weak year for prices, she said.

Statistics on the beef farm exodus is grim but sketchy. "Statscan says there has been a decrease of 15 % of Ontario farms in 5 years," Sytsma said, noting a drop from 67,520 Ontario farms in 2001 to 57,211 in 2006. "Since then, we’ve gone through two more years of hell."

In 2001, Stascan considered 25 per cent of farms were cattle operations.

That translated to13,669 cattle operations, of which only about 3,400 farms derived over half of farm sales from cattle and calves. That number has dropped significantly since 2001, although the Ontario Cattlemen’s Association does not keep actual statistics on farm numbers, Sytsma said.

The declining number of cattle on feed threatens our (Cargill-owned Meat Solutions) packing plant in Guelph, she added. "If that packing plant in Guelph closes it’s the same as one of those big three car plants closing. That’s how much GDP it puts into the economy in Ontario.

"We need that plant and that plant will not run unless it is running at least at 65 per cent capacity."