As Anne Dunford has mentioned many times in the Beef Market Update, the realities of the cow herd reduction will eventually show its face in the supply and demand equation. Sometimes you just need to see things for yourself.
This week as my dad, my brother and myself drove on some back roads from Kimberley to Fairmont and on to Windemere there was a couple observations we all made in the truck regarding the farms that we saw.
1. The reduction in the cow herd seems to be live and well. We drove on many side roads traditionally filled with cattle naturally crossing the road as they graze. We only encountered this one time on the trip.
2. Due to the reduction in grazing and hay needs, grass is being tilled up to plant field crops. Pivots are no longer just irrigating alfalfa but also barley and triticale and canola seed production.
As of January 2009 BC represented 212,000 head of cattle or 5% of the total Canadian beef cow herd. With the majority of this being ranch cattle in the in the different valleys spread across the province on some of the most beautiful land and scenery in North America.
Over the past five years I am not sure the accurate numbers in terms of the cow herd reduction but my qualitative observations seemed real. Even some of the locals say that the reduction in the amount of cows is real and they know more and more people that no longer have cows.
Growing up on a feed yard I can distinctly remember the strong feeling of quality of the BC feeder cattle that would come to the yard. I can remember when we would buy feeders on the TEAM auction and were able to buy cattle directly from BC ranches and how that was looked upon as a positive for the business.
BC is the heart of ranch country with some of the largest ranches in the country along with many smaller ones as well. We cannot afford to lose everyone in the cow industry. The beef industry has significant infrastructure set up for feeding cattle which requires a feeder system to supply it. The ranching sector needs to be profitable if this industry is going to survive in the long run.
After a quick drive through some of the back country it is clear that the reduction in our cow herd is real and should not be underestimated. I feel really strongly about this after talking to some of the local people and hearing their stories and anecdotes. Just look at what has been happening in the wheat markets lately with the perceived shortage of Russian wheat due to drought. After several years of cow herd reduction maybe this year will provide a very steamy feeder cattle market. Only time will tell.