Healthy market prices continue to discourage Canadian cattle herd expansion.
The latest inventory numbers from Statistics Canada show the smallest cattle herd since 1993 at 11.9 million head as of Jan. 1.
The number was no surprise to Brian Perillat, senior analyst with Canfax.
“We knew cattle numbers were going to be down for sure, just with smaller calf crops and the big exports last year,” he said.
“Maybe cow numbers were down a little more than we were expecting, but we knew we didn’t have any herd growth in 2014.”
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Total cattle inventory dropped 2.5 percent from Jan. 1, 2014. The domestic beef cow herd, at 3.8 million head, was down two percent from a year ago. Calves, at 99,400 head, were down 2.5 percent from 2014.
Heifers held for breeding declined by 1.5 percent to 531,100 head. Dairy cow and heifer numbers declined slightly by .2 percent compared to Jan. 1, 2014, Statistics Canada reported.
Perillat said the cattle industry is through the liquidation phase of the last few years and appears to now be in a stabilization phase.
“If markets do continue to perform well, we might start to see expansion come over the next two or three years,” he said.
“We may still get expansion even if prices drop a little, so long as they stay close to these high prices and high profitability. Profitability is the biggest thing to encourage expansion.”
Perillat said healthy prices paid for breeding stock, as indicated in spring bull sale prices, could also be an indicator of herd growth, but that will depend on market conditions.
“Quite often expansion is not just prices, but it’s often prices relative to expectations.”
Cattle exports provided the big number in the Statistics Canada report. Exports during 2014 totalled 1.2 million, up 19.3 percent over 2013. Slaughter increased 3.3 percent in 2014 to 3.2 million head.
Perillat said increased exports were expected but the magnitude was a surprise.
“Heading into 2014, we were expecting to see more feeder cattle go south because the plants down there sort of had to pick to either slaughter cattle that were born in Canada and fed in Canada or slaughter cattle born in cattle and fed in the United States,” he said.
Many opted for the latter, likely because of the big U.S. corn crop and resulting lower cost of feed.
“That feed cost advantage drew a lot more than we expected.”
Major liquidation in the U.S. cattle herd last year also forced feeders and packers to seek cattle wherever they could be found.
Healthy prices in the hog sector led to a 1.7 percent increase in numbers, at 13.2 million, compared to Jan. 1, 2014. Sows and gilts numbered 1.2 million animals, up .5 percent from a year earlier.
Hog exports were up through the year. Five million hogs left the country in 2014, up 3.7 percent from a year earlier but down 50.7 percent from the export peak achieved in 2007, said Statistics Canada.
Domestic hog slaughter declined in 2014 by 2.1 percent to 20.5 million head.
Canadian sheep numbers declined in 2014. Ewes were down 1.6 percent and replacement lambs fell 5.7 percent. The number of market lambs also dropped slightly.
Statistics show the domestic sheep herd size declined by at least one percent in every province compared to Jan. 1, 2014 figures.
barb.glen@producer.com
