If the Canadian cattle herd hopes to rebuild, producers must stop bleeding red ink.
“It’s going to take some real profitability in the cow sector and some longer prospects of that,” said Travis Toews, president of the Canadian Cattlemen’s Association.
The average Alberta price for a finished steer has not cracked a dollar per pound since 2001 when the average bid was $102 per hundredweight.
This year, it is hovering around $85 per cwt., although some August bids have made it to the low 90s.
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Since cull cow prices are strong at $60 per cwt., liquidation is likely to continue, leading to the smallest herd in 17 years, according to the July 1 inventory from Statistics Canada released Aug. 19.
As more cows disappear and people continue to slaughter heifers, the result will be fewer feeder calves available next year.
“If we are going to start to even stabilize the herd, much less start to grow, it’s going to take some heifer retention,” Toews said.
Fewer animals could threaten the viability of feedlots and packers.
“Our calf crop can no longer support the infrastructure out there. If we shrink to where we can’t support our infrastructure, then we will take a step back,” Toews said.
The industry turnaround may start this fall, said Jason Danard of the Calgary Stockyards at Strathmore, Alta.
Since 2003, the cow-calf sector has been hit particularly hard with low prices for all classes of cattle.
With tighter numbers showing up this fall, the auction expects a return to profitability on the ranch with higher demand for calves and yearlings.
“Calves are going to be significantly higher than we have seen,” said Danard. “The calf market is going to be good. It is not going to be crazy.
“All of a sudden the business is starting to make sense again and the numbers have made it happen.”
Statistics Canada’s annual July livestock report pegged the national herd at 14 million head, down almost five percent from one year ago.
From January to July 2010, an estimated 1.9 million cattle and calves were sent to slaughter, a 6.5 percent increase from the same six months one year earlier.
Exports of live cattle and calves totalled 613,100 head, up 1.6 percent from the same period in 2009.
The provinces reported fewer cows since January.
Alberta reported 1.7 million cows, down from 1.79 million six months earlier. Saskatchewan’s cow numbers dropped to 1.32 million from 1.38 million.
British Columbia has 199,000 cows but had 197,000 in January. Last July, B.C. reported 223,000 cows, making its decline one of Canada’s largest.
Manitoba’s cow herd dipped to 538,000 from 550,000 breeding females.
The United States also reported a decline for the 15th year in a row. The U.S. Department of Agriculture reported 100.8 million head compared to 102 million on July 1, 2009. There are 31.7 million beef cows, down two percent from 2009.
