Canada’s cattle sector has faced its share of environmental challenges in recent years, as wide-spread and multi-year droughts have put pressure on the overall size of the Canadian cow herd. Several factors, including positive price signals and a return of pasture productivity, will be crucial in stabilizing the cow herd.
Brenna Grant, executive director of CanFax, says that there are some early signals that cow numbers may be stabilizing, but it’s far too soon to consider liquidation at an end.
The feed situation and drought in North America was what caused the liquidation part of the cycle that producers found themselves in. With a return of moisture this past spring and summer, the slaughter of cows has begun to slow down, and the industry is moving into a consolidation phase.
In order to move through this consolidation phase, producers need three things, Grant says: they need the profit signal to actually expand, they need confidence that not only do they have enough forage available to carry them through the winter but enough to get through the next drought, and they need strong expectations in the future of the market.
While knowing the state of cow numbers in the country is an important part of understanding where the industry is in the cattle cycle, the other part of the equation is to look at how many replacement heifers producers will be holding back. There continues to be low heifer retention numbers, and while the Statistics Canada July 1 cow number is always a soft number, Grant cautions, a lot can happen this fall between preg checking heifers and the winter feed that producers might have available.
“We’re still well below historical relationships in terms of the percentage of those replacement heifers as a total of your beef cow herd. And that really indicates that even though it’s up, we’re probably looking more at… a consolidation phase of the cattle cycle versus an expansion phase,” she says. “We still need to see a lot more heifer retention before that happens.”
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