The speaker program at last week’s Ag Days in Brandon included a panel on farm profitability.
While returns in the crops sector have been tightening, cow-calf producers are seeing record high returns. However that profitability isn’t translating into a rapid expansion of the cow herd.
The Ag Days profitability panel included Ben Hamm, a Farm Management Specialist with Manitoba Agriculture.
Hamm is the lead for forage and livestock cost of production in the province. He also owns and operates a 250 head cow-calf operation with his dad and brothers.
Hamm says cow-calf producers in 2025 typically had more profit per cow than the previous 20 years combined. Profits were in the range of $1,500 to $2,000 per cow, compared to $200 to $300 per cow in 2014-15, he added.
"We had some guys excited. They went in, they bought $3,000 cows, but by 2017-18, they had to sell those cows and the farm because they couldn't make those payments. So those stories are still in people's minds, and we just don't know how much someone can invest in those cows because we don't know for sure that price will be there next year."
Then there’s a great deal of expense and uncertainty for producers wanting to expand, from high-priced land, to competition with grain farmers, to expensive farm equipment.
"When we have all three of those inputs that require you to get into the industry, it does make it very challenging for a producer who has no equity from their parents to start up." Hamm said.
Hamm is a strong advocate for Livestock Price Insurance and he’s surprised that uptake by producers wasn’t higher last year. Cow-calf producers, including, did not collect on Livestock Price Insurance last year, but they were able to protect high profit levels.
"I bought in all of my policy for my calves February 1st last year and they were offering $4 a calf. I thought that was amazing. We had a lot of tariff talk on the table. I didn't want to have any concern that, you know, $4 calves, that was amazing. I bought all of my policy and you know what, I slept good all summer not having to worry that I wasn't for sure going to get $4 calves if something chaotic happened.
"And you know what, it sold at $6.30, $2.30 higher than what I bought at, but I was comfortable with that value. And I would do that all over again. If we have $4 calves, I mean, we're going to have more than $4 calves because the backgrounding, the feeder side is offering $4.34, $4.35. So we're going to be closer to $4.75, $5 for cow-calf. I will be buying all of mine February 1st again.
Hamm says AgriStability is becoming more relevant for cow-calf producers as yearly margins improve. He also worries that some unincorporated farm operations may be shocked by the size of their income tax bill in the next couple of months.
