Can Swedish beef production become profitable by learning from Canadian beef production? :

Abstract: To make Swedish beef production more profitable and sustainable, even without subsidies, there is a need to find alternative production systems to reduce the cost of production. One way to find cheaper solutions for Swedish beef production is to learn from beef producers in other countries and regions with similar natural conditions as Sweden. Western Canada has a good and large scale cow-calf production and finishing of calves, and Peace River Region (PRR) in British Columbia (BC) has similar natural conditions as Central Swedish Flatlands (CSF). Alberta, where most calves from PRR are finished, and PRR are used as study regions for finding cheaper beef production systems than present in Sweden. How to reduce Swedish costs are investigated by comparing PRR and CSF budgets for cow-calf operations as well as Albertan and CSF budgets for finishing beef cattle. For CSF, budgets from the Swedish University of Agricultural Science are used. One important reason for the low costs of beef production in western Canada is outdoor wintering of the cows and finishing of young cattle in open feedlots. In order to more closely study the possibilities of introducing Canadian production systems in Sweden; natural conditions, history and especially present production systems in western Canada, cow-calf operations in PRR, feedlots in Alberta and a museum were visited. Swedish beef production is characterized by high costs of production caused by small herd sizes, relatively high labour costs, high demands on buildings, short vegetation period and lack of large and connected pastures. Western Canadian beef production is much younger than Swedish beef production and is more characterized by outdoor wintering, large scale production, ranching culture and low building costs. Cow-calf operations are the start of most beef production in western Canada and these are mostly situated in areas where there are poorer conditions for grain production. Beef cows are kept outdoor year around and outdoor wintering reduce the costs of buildings and labour since the cattle are grazing for a longer period. Feedlots are located in regions where the grain production is high and most feedlots in Canada are located in southern Alberta. Most expenses in cow-calf operations are considerably higher in CSF than in PRR and the biggest differences are building and labour costs. Since the wages per hour for a farm worker in PRR and in CSF are almost the same, one reason why labour costs are lower in PRR is the fewer working hours that are needed per cow, which depends on bigger herd sizes in PRR. A reason why building costs are lower in PRR than in CSF is that beef cows are wintered outdoors with a minimum of constructed shelter in PRR while in CSF the cows are wintered indoors in expensive buildings. Rational outdoor wintering can also be a reason for lower labour costs because outdoor wintering is more cost effective. If cow-calf production in Sweden would follow the production model in Canada, with 200 beef cows and outdoor wintering, the expenses could be fully covered, whereas the present Swedish cow-calf production is unable to cover its costs including e.g. feed, buildings and labour. If the governmental payment will be abolished, even though the PRR cow-calf system is used the result will be negative, but not as negative as with present Swedish cow-calf production. In finishing operations the costs of building, labour and feed are higher in CSF than in PRR. To reduce these costs in Sweden there is a need for bigger herds and less demand on the buildings. In Alberta it is enough with windbreakers but in present Swedish production system the animals are housed indoors in expensive buildings. If the finishing operation in Sweden, with male animal premium, could follow Albertan feedlot model the operations could be profitable. If the male animal premium would be abolished, even though the Albertan production system will be used, the result will still be negative, but not as negative as with present Swedish finishing system. To have cattle wintered outdoors in Sweden, with a minimum of constructed shelter, there is a need to find suitable areas. Such areas can be where the climate is suitable i.e. not too much precipitation and solid frost in the ground during winter time. The land should have low opportunity cost and the soil should be a dry sandy moraine soil with good infiltration capacity.