Canadian Cattle Herd to Expand

CANADA - Excellent pastures and abundant forage will support stabilization in the cattle sector. Inventories will modestly increase in 2013, while exports of cattle will fall. Heavier carcasses will compensate reduced slaughter resulting in a stable beef production, with trade staying flat, according to the USDA's Canadian Annual Livestock report.

19 September 2012

2 minute read

North America

With the years of decline left behind, the Canadian cattle sector has now stabilised and is looking for opportunities to grow.

Excellent pasture conditions and an abundance of forage are currently the basis for such potential and will help the sector weather the following period of expected high feed prices.

Barley and wheat, both substitutes for corn in Canada, will be plentifully available, though at elevated costs. For 2013, Post forecasts a very modest increase in inventories and calf production.

More cattle are expected to stay in feedlots and be finished locally, rather than be shipped to the United States. Exports in 2013 will thus see a decline, in stark contrast with the first half of 2012.

Given a limited supply of slaughter cattle and a stable demand for beef, packers have become interested in heavier animals.

The trend observed in 2012 will continue into 2013, with heavier carcasses exiting slaughterhouses. Beef production is expected to remain flat into 2013, for a third consecutive year, although slaughter will see a mild drop of 0.5 per cent in 2013 after a more significant four per cent decline in 2012.

With beef supplies tight, the market will rely on imports to fill the gap, which are forecast to increase by a meager 1 percent in 2013. A limited production and the continued strength of the Canadian dollar will remain the reasons why beef exports will continue to stay flat, below recent average levels.

In 2012, Canada is expected to import the same amount of beef as in 2011, while exports are estimated to decline by almost four per cent.