April 13, 2006

Slaughter capacity in Canada levels off as under-utilisation hits home
 

Expansion of Canada's slaughter capacity is slowing down, as excess capacity lead to under-utilisation of slaughter facilities.

After the onset of mad cow disease in 2003 which saw Canadian beef being banned from the US, slaughter capacity was increased from 3.5 million head annually to 5.0 million by the end of 2005, according to the Canadian Beef Export Federation.

The country's total slaughter capacity should soon reach 105,000 head a week, said Dennis Laycraft, executive vice president of the Canadian Cattlemen's Association. However, processors are only slaughtering 75,000 cattle each week, not unlike levels before the mad cow case in 2003, he added.

To make matters worse, many of the country's producers are moving feeder steers and heifers to the US to take advantage of cheaper feed costs there.

Slaughterhouses in Canada are having difficulty finding enough age-verified cattle to meet the Japanese under-20-month requirement.

Laycraft said aggressive marketing efforts are needed if Canada wants to get better value for its beef. There has to be decent returns at the Canadian packing operations if such plants are to survive, he added.