The current phase of the cattle cycle, featuring increased slaughter and a shrinking Canadian herd, has produced some pleasant surprises for Brooks, Alta. cattle producer Dave Andrews.
The main one is price. Normally, prices soften in the phase of the cycle that features increased slaughter and sales.
This year, prices remain strong and there are predictions of further strengthening. There also is a prospect for cheaper feed, at least in the short term.
“I’d say the strength of the beef market at this stage in the cycle is a surprise, a pleasant surprise,” the president of the Canadian Cattlemen’s Association said Aug. 18. “And I think the cattle business will remain profitable for another three or four years, and then we’ll see.”
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Earlier in the day, Statistics Canada published its semi-annual report on livestock inventories. It showed the Canadian beef herd shrank during the year ended June 1 by 0.9 percent to 4.7 million beef cows.
To Anne Dunford of Canfax, the CCA market research arm, the federal numbers were surprisingly large.
She expected the beef cow herd to have fallen between three and four percent.
“The numbers just don’t ring true,” she said. “We had a major cow slaughter in 1996. I really expected that to be reflected in these numbers.”
She said herd rebuilding should logically begin this autumn with calf retention, but if feedlots continue to pay high prices, the temptation to sell as many animals as possible may be too great.
And Bill Black at Canfax noted that with prices between $1.14 and $1.20 for a 900-pound steer, marketing temptations are strong.
“There is some insanity out there in the market,” he said from Calgary.
Meanwhile, if the federal agency over-estimated the beef herd, it may have under-estimated the hog population.
Statistics Canada reported an almost stable hog population of 12.126 million between July 1996 and July 1997.
Martin Rice, of the Canadian Pork Council, said he thinks the government surveys missed many of the newer and expanding operations.
“I find these numbers a little surprising,” he said from Ottawa. “I was expecting a three to four percent increase.”
In particular, a reported 37,000 decline in the Manitoba numbers does not ring true, he said. “I expected an increase.”
The federal numbers showed a small decline in the Saskatchewan herd and a 35,000 increase in the Alberta herd.
Rice said that with announcements of increased hog processing capacity for the Prairies, he expects the hog herd to expand between five and six percent in future years.
“I expect a strong growth will be picked up in future reporting,” he said.
