1. Choice of Adaptation Strategies in Extreme Weather Events: A Case Canadian Prairie Beef Farms
Santosh Poudel and S. N. Kulshreshtha
Department of BPBE
University of Saskatchewan
22nd Annual Farming for…. Profit? Moose Jaw Conference
June 21-22, Moose Jaw

2. Outline
Background of the study
Beef production in Canada and the Prairie
Common drought coping strategy of beef farm
Methodologies
Results
Summary and conclusion

3. 1. Background
Economic impact of extreme events such as longer duration drought on beef operation is expected to be significant due to its impact on beef feed production.
Impact of such events on farm management and longer term farm financial situation is relatively unsearched in Canadian prairie.

4. Livestock production was adversely affected 1987-1988 drought;
effects on feed, and
the lack of suitable pasture land due to drought (IISD, 1997).
2001 and 2002 Canadian Prairie drought
widespread scarcity of feed and water.
Livestock inventories sharply decreased (AAFC, 2013)

5. Warmer prairie with more extreme droughts are projected in the future (Zhang et al., 2000; Khandekar, 2004; Barrow et al., 2009; Price et al.,2011; Bonsal et al., 2012; Paimazumdar et al., 2013)
Impact on beef could be more severe due to the feed and water shortages especially if the drought lasts for longer period in the future.
Two beef farms: one in Swift Current and another in Pincher Creek were modelled in this study.

6. 2. Beef production in Canada and the Prairie
Largest single commodity source of farm cash income. Average 2001 to 2010 period was 15.4%. The highest in 1977, 24%
Figure 1: Contribution of cattle to Canadian cash farm income, Source: Kulshreshtha (2012)

7. Beef production in Canada and the Prairie
Table 1: Share of cattle sector to Canadian farm cash income by province, Canada, 2011
Province
Level of Farm Cash Income from Cattle and Calves (Million $)
% of Total Canadian Cash farm Income
Newfoundland and Labrador 3
0.05
Prince Edward Island
21.6
0.33
Nova Scotia
23.7
0.37
New Brunswick
24.3
0.38
Quebec
514.2
7.97
Ontario
1028.3
15.95
Manitoba
421.4
6.53
Saskatchewan
1039.2
16.11
Alberta
3167.3
49.11
British Columbia
206
3.19
Canada
6449
99.99
Source: Kulshreshtha (2012)

8. Beef production in Canada and the Prairie
About 42% of total farm in Alberta and 27% of total farm in Saskatchewan reported to have beef cattle in 2006 (Statistics Canada, 2006).
Figure 2: Number of Farm reporting beef cattle operation in Saskatchewan and Alberta at July 1st, Source: AAFC (2014)

9. Beef production in Canada and the Prairie
Figure 3: Number of beef head in Saskatchewan at July 1st, Source: AAFC (2014)

10. Beef production in Canada and the Prairie
Figure 4: Number of beef head in Alberta at July 1st, Source: AAFC (2014)

11. Beef production in Canada and the Prairie
Table 2: Beef farm and number of head in study sites
Animal type
Pincher Creek (Div 3)
Swift Current (Div 8)
2011
2006
Steer for slaughter
# farms
430
495
254
370
# animal
53,057
55,847
8,423
13,047
Average (#/farm)
123
113 33 35
Heifers for slaughter   
# of farms
286
326
159
206
# Animal
54,864
43,623
7,519
9,777
192
134 47
Beef cows
953
1,166
721
983
112,027
123,338
66,624
81,692
118
106 92 83
Source: Statistics Canada (2011)

12. 3. Common drought coping strategies of beef farm
Bastian et al. (2006) reported common coping strategies as
Purchasing additional feed for livestock
Livestock herd liquidation
Management alternatives like early weaning of calves, and addition of alternative crop and livestock enterprises
Ritten et al. (2011) recommended two approaches:
Purchasing additional feed, and
Reducing feed demand of the herd either by management or by reducing herd size.

13. Common drought coping strategies of beef farm
OMAFRA (2012) advises three options of dealing with feed shortages;
moving livestock where abundant feed and forages available,
buying feed, and
culling herd.
SMA (2008), AARD (2014c) and interview of mixed crop beef farmers suggested
the feed management,
changes in timing of herd operations, and
reduction in herd size

14. 4. Methodologies
4.1. Study Farms
Statistics Canada (2011) customized mixed farm data are used to create a synthetic farm for the study.
Representative Pincher Creek Farm: 307 beef herd (100 cow, 88 calves, 16 replacement heifer, 6 bulls, 97 finishers); 1700 acre native mixed pasture, 686 acre crop area including hay,
Representative Swift Current Farm: 197 beef herd (86 cow, 74 calves, 13 replacement heifer, 4 bulls, 21 finishers); 1500 acre native mixed pasture, 1057 acre crop area including hay,

15. 4.2 Overview of the methodological framework
Figure 5: Single year static overview of the simulation model

16. 4.3 Scope of the simulation model
Base scenario is 30 years period of and future scenario is
Crops and forage productivity under given climate and inputs are simulated by crop and forage models respectively. Climate variable doesn’t enter the simulation directly.
All the coefficients to run beef herd model like herd activity, nutrient demand, timing of operations are adopted from real world observations
Crops, forage, beef and price models are estimated separately and output of each models enters as input in the whole farm simulation model.

17. 4.4 Adaptation measures tested
1) Farmer feed the inventory grain and forages and purchase additional feed if necessary, without any changes in management. – PURCHASE FEED-Reference case
2) Farmer try to reduce total feed demand of the herd by changing timing of beef herd operation like early weaning of calves and early sell of open cows and slaughter animals, and – CHANGES IN MGMT
3) Cull herd decision starting from open cows to exactly match the reduced feed supply due to extreme weather events. –CULL HERD

18. 4.5 Pasture productivity estimation (Method adopted from Dr Jeff Thorpe, SRC)

19. Pasture productivity estimation (Method adopted from Dr Jeff Thorpe, SRC)

20. 5. Simulation results 5.1 Gross Margin (GM) calculation
Table 3: Return from beef activities
Adaptions
Pincher Creek
Swift Current
Base Scenario
GM (PV,$)
Average ($/year) CV
Purchase feed
633,861.12
45,747.89
0.36
395,067.86
29,539.28
0.56
Changes in mgmt
416,233.53
31,072.21
0.64
247,472.93
19,128.00
0.98
Cull herd
527,979.65
38,696.80
0.47
265,380.35
20,394.38
0.95
Future Scenario
950,980.23
67,326.62
0.29
553,691.52
44,493.04
0.60
527,965.36
41,438.70
0.67
216,596.35
21,577.52
1.27
658,355.89
46,214.60
0.57
64,987.85
5,263.07
4.05

21. 5.2 Choice of adaptation measures
Table 4: Comparison of adaptation options, Pincher Creek Alberta (Purchase feed as reference)
Changes 
Profitability
Liquidity
Net worth
Beef activities (GM)
Crop activities (GM)
Farm level (GM and NPV)
Cash flow (Farm and family)
Baseline scenario
Changes under "changes in mgmt"
Negative
Positive
Changes under "Cull herd"
Small Positive
Future scenario

22. Table 5: Comparison of adaptation options, Swift Current (Purchase feed as reference)
Changes 
Profitability
Liquidity
Net worth
Beef activities (GM)
Crop activities (GM)
Farm level (GM and NPV)
Cash flow (Farm and family)
Baseline scenario
Changes under “Changes in mgmt"
Negative
Positive
Changes under "Cull herd"
Small Positive
Future scenario
Changes under "Cull herd”

23. Table 6: Return to drought feeding
Baseline
Pincher Creek
Saskatchewan
Cost/Return ($)
% return over cost
Cost of drought feeding
45,327.23
Return to feeding
105,881.47
233.59
129,687.52
286.11
Future
17,351.61
283,001.68
1,630.98
464,174.87
2,675.11

24. 6. Summary and Conclusions
Maintaining herd size without compromise on feeding is identified as superior to other alternatives in managing beef herd
Limit feeding options to manage beef feed deficit severely impact herd output and cull herd strategy negatively impacts long term productivity potential.

25. 7. Summary and Conclusions
Due to negligible impact on pasture productivity in the Pincher creek, impact of extreme event would not be much severe in the future. Impact on Swift Current would be sever due to relatively significant impact on pasture production.
Negative impact of extreme events in the future would be diluted by the positive gain in the future given the appropriate choice of drought coping strategies are followed.

26. Thank You