Agribition is a happy place
It’s amazing that in a year when Canada’s beef industry was crushed by collapsing cattle prices and buffeted by soaring barley costs, Canadian Western Agribition still attracts big crowds.
Not even temperatures dipping below minus 30 overnight keep them away.
Agribition’s optimism might be understood better if you consider the following.
Analysts such as Randy Blach of Cattlefax predict the lows of the current cattle cycle have been hit and prices will begin to climb.
Cattle cycles typically last 10-12 years, generally consisting of five years of expansion, three years of liquidation and two years of consolidation.
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The dry weather in the west was welcome for preserving grain quality and advancing harvest, but it has resulted in very dry soil moisture conditions.
It appears the herd size in Canada and the United States has peaked, prices have hit their lows and liquidation is now occurring.
Time to invest
Many producers are just trying to repair their balance sheets. But analysts say ranchers should consider the possibility of expanding now to position themselves to take best advantage of the coming upward swing of the cattle cycle.
Another reason for cattle industry optimism includes the end of the Crow Benefit. The explosion in barley prices last year masked what should have happened following the end of the transportation program, namely lower feed costs.
The end of the Crow is one factor driving the plans of several producer groups in Saskatchewan to build large feedlots. They plan to turn out 36,500 head a year as part of integrated operations that also produce ethanol and food fibre. If they are successful, that will increase the demand for feeder cattle.
Internationally, there is gradual improvement in beef exports to Pacific Rim countries. There was a setback this year because of food poisoning in Japan linked to E coli, but most analysts believe the growing affluence of Asian consumers will provide a long-term growing market for North American beef.
And cattle producer groups are addressing probably the major threat to beef consumption in the domestic market, namely steaks and roasts that are a disappointing meal.
Breed organizations are adopting quality control programs to track beef from pasture to plate, trying to ensure that the right genetics and management deliver a tasty product to consumers.
Considering all this, it’s no wonder there are far more smiles than frowns at Agribition.
