September 18, 2008

Canada's red meat production is expected to fall 1.5 percent in 2008 and an additional 3 percent by the end of 2009 due to high feed costs, according to the USDA attaché report.

Cattle and hog inventories showed declines of 4.3 percent and 11.6 percent respectively at mid-2008 compared to a year ago, the report said.

"A cost-price squeeze has adversely impacted the profitability of livestock production and about one in 12 cattle producers and one in five pig producers have exited the business. These developments point not only to lower red meat production through 2009 but also to lower exports of live cattle and hogs to the US," the report said.

Total Canadian pork exports remain steady but beef exports are struggling to recover to a pre-BSE level.

The report said red meat imports from the US are ironically increasing at a record pace reflecting a strong Canadian dollar and high demand among the Canadian retail and foodservice industries for US red meats.