Near-record fall in national cattle stock; industry rebounding from border ban

OTTAWA — A year after the U.S. reopened the border to young cattle, the Canadian beef industry is showing positive signs of recovery, states a report published this week by Stats Canada.

The Canadian cattle herd has plunged by 810,000 head, a near record decline for a single year, according to the annual Livestock Survey of 10,000 producers. Most of these animals were exported to the U.S.

As of July 1, cattlemen reported 16.2 million head on their farms, down 4.7 percent from the record 17.1 million head on the same date last year. It was the first decline in the national herd in seven years, according to Stats Can.

The cattle industry is recovering, but
still isn’t close to pre-BSE ban levels

All provinces saw stocks decline. Alberta’s herd, the largest of any province, plunged 6.0 percent, Saskatchewan’s fell 4.8 percent, and Manitoba’s, 2.0 percent. In B.C., the herd dropped by 9.3 percent, while Quebec’s cattle count edged down 1.0 percent, and Ontario’s fell by 4.2 percent.

But business isn’t close to levels prior to the 2003 border closure, as the national stock was still 814,000 above the level at July 1, 2002, prior to the border closure.

Last summer, the U.S. welcomed back Canadian cows under 30 months of age after a two year ban. The prohibition was first enacted in May 2003 because of a single Alberta cow discovered to have bovine spongiform encephalopathy (BSE).

The U.S. Department of Agriculture is currently reviewing a proposed to lift all cattle-related restrictions. But several recent BSE discoveries in B.C. and Manitoba have delayed that process.

The study shows that exports of live cattle to the U.S. rose rapidly once the border was reopened. However, recently, monthly exports have tumbled as drought-stricken U.S. ranchers shipped cattle early, pushing U.S. slaughter up and prices down, the report states. Reduced demand for Canadian cattle, coupled to lower prices up here, discouraged Canadian exports.

Slaughter levels have also been a key factor in the cattle business. During 2004 and the first half of 2005, levels hit record highs. They were fuelled by increased slaughter capacity, domestic demand, strong international demand for Canadian beef and lower levels of beef imports.

However, levels have tapered off in the wake of lower exports of beef meat, now that the border is open to live cattle. Slaughter in the year up to July 1, 2006, was down 8.0 percent.

Meanwhile, other livestock sectors which saw slight spikes during the BSE ban for cattle, edged lower. Hog inventories remained lower during the second quarter of 2006, consistent with soft prices.