NIAGARA FALLS, Ont. – For Canada’s most prominent cattle industry market analyst, news of a near-record decline in cattle numbers during the past year was hardly a surprise.
Anne Dunford, with the Canadian Cattlemen’s Association Canfax service, said shrinkage in the record herd that built up during the BSE crisis was predictable because the open United States border would attract some animals south.
Higher U.S. prices made the movement inevitable.
“It wasn’t a big surprise,” she told the CCA annual convention Aug. 16. “It was pretty well what you would expect. U.S. prices have been strong and that draws cattle down.”
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For the week ending Sept. 6, Western Canadian feeder cattle markets were relatively unchanged compared to seven days earlier.
There also was a Canadian herd bulging at the seams and looking for a home. The July 1, 2005, livestock census counted a record 17.1 million animals on farms and in feedlots.
However, exports have dropped sharply in recent months as drought in several major American cattle states has forced herd liquidations and the increased marketings have driven down prices and reduced the need for imported cattle.
CCA president Hugh Lynch-Staunton said the new numbers reflect an industry adjusting to the end of the worst of the BSE crisis.
“There is some cross-border access and we have more domestic (slaughter) capacity so the herd size is adjusting to more normal levels,” he said.
“Export and import levels will ebb and flow and that is the way it should work in an integrated market.”
Last week, Statistics Canada reported that as of July 1, 2006, the Canadian herd had shrunk by 4.7 percent during the year to an estimated 16.2 million animals. Most of the decrease was recorded on the Prairies where the herd had swelled by 1.3 million during the more than two years of total border closure.
The 810,000 head decline in the herd was more than accounted for by an export of 1.1 million animals to the U.S. during the year after the border partially reopened in July 2005. It represented 78 percent of pre-BSE export levels.
The lure of higher prices south of the border meant that many of those feeder cattle heading south were being driven past recently expanded Canadian packing plants whose capacity use rates fell from BSE-closed-border levels of 88 percent to 70 percent during the past year.
The amount of higher-value processed beef exported to the U.S. market fell during the past year while the volume of lower-value live exports increased. Statistics Canada said part of the reason was a three-week packer strike in Alberta in late 2005.
A higher valued Canadian dollar also affected the profitability of exports.
Still, the 2006 Canadian herd remained 814,000 head larger than the herd size before BSE was discovered. Part of the reason is that fewer older cattle are being culled because access to American plants for cattle older than 30 months remains closed, at least until next year.
Dunford told the CCA meeting that cull rates for 2006 will be eight percent of the herd compared to a 15 year average of almost 11 percent.
The dairy sector has been hit particularly hard since its cull rate is typically higher than the industry average.
