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An analysis of the fed beef industry in the Fraser Valley region of British Columbia Osborn, Edward Tryon

Abstract

The study was undertaken to describe, analyze, and evaluate the Fraser Valley Fed Beef Industry in relation to the market requirements in the Lower Mainland and Vancouver Island regions of British Columbia. The information necessary to describe, analyze, and evaluate the industry was acquired by a review of the secondary data sources of the Provincial and Federal government agencies, to acquire industry statistics; a survey by personal interview with the majority of the fed beef producers, to acquire information on management techniques; and a financial analysis of a random sample of the feedlot operations, to provide the parameters on which to evaluate the profitability of investment in the industry. The study indicates that the fed beef market in the above regions has increased some 400 percent since 1951. The British Columbia fed beef industry has increased in size in the above period. However, it still only provides approximately 20 percent of the market requirements; with the Fraser Valley industry providing 82 percent of the British Columbia fed beef production. The balance of the market requirements are met by the importation of fed beef slaughter cattle and carcasses mainly from Alberta and to a lesser extent Saskatchewan. The analysis of the input factor markets indicates that the important resources necessary to produce fed beef are available from within the province although the present practices of the ranch industry in marketing the majority of the feeder cattle and calves in a few months of the year increases the difficulty of realizing optimum use of the feedlot facilities. There exists a significant variability in the sizes and types of operations in the Fraser Valley. The majority of the operations are farm feedlots utilizing by-products and pasture supplemented by the purchase of feeder cattle and feed grains from the interior regions of the Province. The manure produced in the feedlot is an important ingredient for use in the cash crop production on many of the farms located on the heavier soil zones. A few larger commercial feedlots exist within the region although the largest operation has a unit capacity of 2500 head of yearling cattle. The majority of the feedlots use barley as the main energy source although there exists a wide diversity in feedstuff ingredients utilized in the feed ration. A discounted benefit-cost ratio analysis of various types and sizes of feedlots would indicate that capital investment in the industry is undesirable investment opportunity at a after tax discount rate of 10 percent. However, the presence of special circumstances, ensures the continuing presence of the industry on the same scale and a moderate increase in the industry in the future under present institutional and economic policies.

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