COLUMN - A View of the Industry

by Deb McMillin

The Statistics Canada report of Canadian cattle inventories report recently pegged the total cattle and calves inventory to be lower once again, with a total of 13.18 million cattle and calves on January 1, 2009 - 5.1% lower that the January 1, 2008 total.

This comes as no surprise as the number of cows marketed for slaughter was large in 2008. The total cattle and calves inventory in Canada has been on the decline since its peak in 2005. Cattle numbers grew quickly after 2003 when Canadian producers found limited opportunity to market mature cows in Canada and did not have access to export markets. The current inventory report however states that the inventory has decreased back to a level under the pre-BSE totals in 2003.

The number of beef cows reported in Canada was 4.65 million head, which was down 7% from a year ago. This varied regionally as the eastern provinces saw a reduction in beef cow numbers of 3% while the western provinces saw more significant changes. Alberta beef cows were down 7% while Saskatchewan and Manitoba both saw a 6% reduction in beef cows in the past year. BC saw the largest change with a reduction in its beef cow inventory of 15% since the start of 2008. The report also confirmed that the number of heifers being kept as replacement heifers was smaller in Western Canada with the exception of Manitoba. Manitoba replacement breeding heifer numbers were 11% larger than in January 2008 while Alberta was down 14% and BC and Saskatchewan were both down 12%.

Looking specifically at numbers for Manitoba the total number of cattle and calves in the province is 1.28 million head, down 6% from 2008. Beef cows totaled 575,000 head in the January 1 report for which was down 6% from January 2008 but was up 4% from January 1, 2003. The number of reported dairy cows in Manitoba was up 2% on January 1, 2009 to total 45,000 head.

The total Canadian inventory is expected to continue lower in the coming year. Slaughter is expected to remain strong due to increased demand for grinding and trim meats lead by consumers looking for decreased grocery expenditures through the economy troubles. In addition there is still considerable market uncertainty due to current input costs in cattle production as well as uncertainty around the effects of COOL on the entire Canadian cattle market.

The USDA recently reported the January 1, 2009 US cattle inventory however at the same time they release revision to the 2008 numbers. These revisions stated fewer than previously reported cattle numbers. The total number of Cattle and Calves in the US on January 1, 2009 was 94.491 million head, down 2% from the revised year ago total.
The beef cows in the US were down 2% and now total 31.671 million head that is the smallest beef cow herd in the US since 1963. These revisions in the US for 2008 coupled with the reduction in the herd throughout the past year results in a smaller US herd than analysts had expected for 2009. Looking forward even as total cattle numbers appear to be bullish in the US expansion is not expected. The US herd is expected to continue to contract due to increased production costs, less grazing land available as producers have looked to cash crops, a softer US economy and its affects on beef demand as well as weather conditions across the US.