Feedlots fill up as farmers turn away from backgrounding
A recent Statistics Canada report on the livestock sector shows some interesting trends in the business of feeding cattle and hogs.
On the beef side, it is clear that producers are reacting to low grain prices and high fed cattle prices by abandoning stocker operations and filling up feedlots.
In Western Canada on Jan. 1, the number of backgrounding and stocking cattle – those that are being fed roughage – fell to 935,300, a drop of 23 percent from a year earlier.
Read Also
USDA’s August corn yield estimates are bearish
The yield estimates for wheat and soybeans were neutral to bullish, but these were largely a sideshow when compared with corn.
At the beginning of the year, there were 12,300 stocker operations in the West. The number has dropped an average of 1,000 a year for the last three years, due to competition from feedlots.
Instead of being fed on grass, those cattle are going into Western Canada’s 1,660 feedlots, helping to push up the number on feed by a whopping 25 percent from the year before.
That compares to an increase of just eight percent in American feedlots, according to the January United States Department of Agriculture report of cattle on feed.
Also, more of the cattle in feedlots were calves less than one year old.
The numbers also indicate there is a gradual consolidation in the beef cattle industry.
The number of western farms reporting beef cattle over the past five years has dropped 11 percent to about 69,500. Meanwhile, the average number of head per operation has grown by nine percent over the same time.
Alberta further established its position as the dominant cattle province by marginally increasing its cattle numbers while every other province saw a slight year-over-year decrease.
Hogs down
Turning to hogs, the overall number of swine in Canada slipped 1.2 percent to 12.26 million, with declines in every province but Quebec and Saskatchewan.
In fact, Saskatchewan hit a record 961,800 head Jan. 1, although it is still only the fifth largest hog producer in the country. The largest is Quebec, followed by Ontario, Manitoba and Alberta.
The report also shows the changing structure of the industry.
Ten years ago, almost half of western hog farms produced less than 1,000 head per year. As of Jan. 1, less than 20 percent are small operations.
In 1991, big farms producing more than 5,000 head accounted for 15 percent of all hog farms.
Today, almost half of them produce more than 5,000 and there is no indication that the trend is going to change.
