July 22, 2004

Canada Cattle Prices Could Plummet If US Border Remains Closed
 

As the United States border continues to remain closed to live Canadian cattle exports, anxiety wrecks the Canadian cattle industry as fall edges closer. 

The industry is facing its largest calf crop in 25 years and they are getting ready to go to market in the fall. If the border does not open prior to fall sales, this could send cattle prices in Canada plummeting. With limited processing capacity, the large calf crop will flood the market with animals, driving down the prices and leaving producers with very little. 

Producers receive 70-75% of their annual income during the fall weaning and sale period.  In a normal year, roughly 4.5 million calves are sold at auction in the fall, but this year the calf crop is estimated around 5 million animals. This is as a result of older cows being kept rather than culled, which leads to another problem facing the cattle industry, too many older, cull cows. 

The Western Premiers recently stated that Ottawa needs to prepare for a massive cattle cull if the border does not reopen by Labor Day, in order to preserve the cattle industry in Canada.  The estimated number of cows that would need to be culled could be anywhere from 600,000 to 1 million animals.