March 12 – Canadian Cattle Herd Not Getting Bigger

Unlike the trend observed in the United States, a revised estimate shows cattle producers in Canada are not, in fact, expanding their cattle herd.

Unlike the trend observed in the United States, a revised estimate shows cattle producers in Canada are not, in fact, expanding their cattle herd. 

The United States has been expanding their cattle herd, with the total count up 0.7% from the same point a year ago to 94.4 million. The count for beef cows was up 1.6% year-over-year to 31.7 million animals.

StatsCan initially called Candian cattle to be up 0.9% this year to 11.6 million. However, the results of the 2016 Census of Agriculture actually showed that, unlike the United States, the Canadian cattle herd is not getting bigger. 

Accounting for the reduction in the total count, and beef cattle count in Canada provided by the Census, StatsCan adjusted their data and thus, revealed a downward trend in Canadian cattle. 

This year’s total count of cattle was reduced by  545,000, and the count of beef cattle was reduced by 154,000.

Of greater attention is that feeder supplies outside of feedlots are down 1%, which is the lowest we have seen since 2000.

Overall, the Canadian cattle is not expanding, and the increasing production trend seen in the United States is limited to the United States.

What does this mean for feed grain prices? Well, it’s not exactly bullish. 

With less animals in the Canadian livestock market, this means less animals to feed.

We also know that more animals could be heading to market through the summer months, which will intuitively put pressure on the feed prices.

At this point, we need to be extremely cognizant of where prices are, relative to where they’ve been. Moreover, looking at what feed grain prices down over the months of March and April, we know that prices peak, before heading lower into the growing season.

This aligns with some of our comments from another article today for our Barley GrainCents readers about the direction of feed barley prices.

Further, it’s also why we recommended last week to move to 90% sold on 2017/18 old crop feed barley and to 20% sold  on 2018/19 new crop.

Are you there yet? 

find-better-feed-barley-prices

 

Beef Market Update: StatsCan confirms Canada isn’t following U.S. herd expansion

Statistics Canada has confirmed once again that Canadian cattle producers are not following their American counterparts in expanding the beef herd.

The federal agency published its January 1, 2018, inventory report this week, and Anne Wasko, of Gateway Livestock, walks us through the numbers in this Beef Market Update.

First of all, for the not-so-analytical types, StatsCan offered a lesson in paying close attention to the numbers.

As of January 1, Canadian producers had 11.6 million cattle and calves on their farms, up 0.9 percent from the year previous, said StatsCan. However, the agency adjusted its past estimates downward to account for the results of the 2016 Census of Agriculture.

“The Census is considered the benchmark, and there was a pretty significant revision downward for our current inventory report to get in line with what the Census was saying,” explains Wasko. “For example, the total cattle inventory for last year was reduced by 545,000 head, so StatsCan has been overstating the herd and this is an adjustment.”

Beef cow numbers were pegged at 3.7 million head, up 1 percent from a year ago, but she notes the revision process resulted in a reduction of about 154,000 head.

Doing the math, feeder supplies outside of feedlots are down about 1 percent to just over 4 million, says Wasko.

“Bottom line, that’s the smallest starting inventory for feeder supply outside of feedlots that we’ve had in Canada since the year 2000,” she says. “So again, just focusing on the whole supply not growing in Canada, which is completely the opposite story that we’ve been talking about in the U.S.”

(The U.S. report released a few weeks ago said inventory of all cattle and calves was up 0.7% at 94.4 million head as of January 1. The beef cow inventory was up 1.6% to 31.7 million head.)

H/T: Real Agriculture
About the Author
Brennan Turner

Brennan Turner is the CEO of FarmLead.com, North America’s Grain Marketplace. He holds a degree in economics from Yale University and spent time on Wall Street in commodity trade and analysis before starting FarmLead. In 2017, Brennan was named to Fast Company’s List of Most Creative People in Business and, in 2018, a Henry Crown Fellow. He is originally from Foam Lake, Saskatchewan where his family started farming the land nearly 100 years ago (and still do to this day!). Brennan's unique grain markets analysis can be found in everything from small-town print newspapers to large media outlets such as Bloomberg and Reuters.