April 10, 2008

 

More Canadian cattle shipped to the US for feeding, on high costs

 

 

The high cost of weight gain in cattle in Canada, together with poor returns for finished cattle, have led to a steady stream of Canadian cattle moving to the US for feeding, industry players said.

 

As of March 1, the Canadian feeder cattle population was 87 percent the size of the previous year, at 890,000 head, according to Rob Leslie, manager of CanFax, the statistics branch of the Canadian Cattlemen's Association.

 

Canadian feedlots have the capacity to feed 1.2 million cattle.

 

Leslie said the domestic numbers were down because more animals were going to the US due to cheaper cost of production. He said the trend would continue unless something drastic changes to the cost of gain between the two countries.

 

Cattle float to the place where they are cheapest to feed, said Bryan Walton, chief executive of the Alberta Cattle Feeders Association.

 

Walton said other factors, including the strong Canadian dollar and poor incentives to grow feed grains, were also limiting the potential of the domestic feedlot sector. 

 

Blair Vold, manager of Vold, Jones & Vold Auctions in Alberta expects more cattle to get fed in the US because of less grain cost.

 

Vold added that high rapeseed prices in western Canada would lead to reduced barley acres in 2008, keeping feed prices higher in Canada.

 

In addition to the lower cost of grain in the US, there are also more companies competing for the finished cattle in the US, Vold said.

 

The smaller competition in Canada means that finished cattle prices are relatively poor.

 

Vold said the high grain prices were also starting to be seen in a reduction in the Canada's cow herd, with some producers looking to move pasture land into higher-yielding field crops if they can.

 

Leslie said he did not think the Canadian breeding herd would see a substantial liquidation for the time being.

 

Although the size of the herd has declined by 1 percent over the past year, he said most of that decline was tied to the culling of older cows which were held back during the mad cow crisis.

 

Canada is seeing a larger slaughter of cows, basically reducing the age of the herd, Leslie pointed.