How rapidly can we increase marketable beef supplies?

If the Canadian industry is to take full advantage of recently opened and expanded markets outside of NAFTA this will require a significantly expanded breeding herd. The industry is already missing out on these opportunities and will continue to do so if cow numbers do not increase. This caused me to take a look at how soon increased supplies might be available.

The cattle industry is naturally fettered by the biological realities of a long generation interval and single calves. In a practical sense the herd owner makes a decision to expand his herd and follows that up with a decision to reduce the rate of cow culling and to increase the rate of heifer retention. Some will argue that one can increase the herd much more quickly by buying in cows and heifers and this is true in individual cases. But doing so cannot increase the national herd a single head. It just changes ownership.

Several years ago I devised a spread sheet to illustrate the dynamics of the cattle cycle and it has appeared in succeeding issues of the Cattle Cycle Booklet, now occasionally revised and updated by Canfax. I use it now to explore the rate at which beef supply can be increased.

We will begin this discussion by setting the productive and reproductive parameters at what I consider to be optimal levels.

  • The cow culling rate will be maintained at a practical minimum of nine per cent.
  • The conception rate will be maintained at 95 per cent
  • The weaning rate is defined as the per cent of cows that conceived and weaned a live calf (thus including survivability at birth) and will be maintained at 96 per cent.
  • Natural death loss of cows will be set at one per cent per annum.

These are admittedly pretty high targets but the industry has been doing about that well for some years now.

With these parameters in place the decision to expand production will commence with the retention of heifers in the fall of year two and expansion at a predetermined rate will proceed for six years.

To commence on a practical basis I looked at historic periods of sustained expansion to determine the appropriate scenarios I would test. In the years 1951 to 1954 beef cow numbers increased an astonishing 73 per cent or a compound annual rate of 14.7 per cent. But this was at a time when dairy cow numbers were static and one suspects that many were simply redefining their herds as beef cows.

From 1969 to 1975 a compound growth rate of eight per cent was maintained without apparent difficulty and from 1987 to 1996 a much more sedate compound growth rate of three per cent was maintained.

With this as precedent I used my template to illustrate the effects on supply of a 4.0, 8.0 and 12 per cent compound growth rate over six years. The percentage figures in the table therefore show the percentage increase in supply reached in the sixth year of expansion.

increased beef production table

The table shows the capacity to increase production at three different possible expansion rates and shows the growth of the cow herd, the increase in weaned steers, the increase in weaned and salable heifers, the combined increase in steers and salable heifers and finally, with a nod to the non-fed beef supply, the increase in culled cows.

Since a 4.0 per cent rate of expansion is the most that can be realistically expected it is worth noting that after six years of expansion the number of weaned steers and salable heifers would have increased just 20 per cent.

graph of weaned steers and salable heifers

The graph reveals the percentage increase of steers and salable heifers combined in each of the years of expansion. The graph also shows two other important features of the cattle cycle. It shows that at the outset the growth is low and in fact is zero or negative in the first year of expansion due entirely to the withholding of heifers. Then, whichever growth scenario is considered, we see a compounding effect by maintaining a constant growth rate. The second and dramatic effect is the second entry for year six. In the first entry of year six I maintained the growth rate in the previous years into year seven. In the second entry for year six I ended the growth phase in year six to illustrate the sharp surge in supply caused when “the expansion music stops” and more heifers are suddenly made available for feeding.

The increases in supply depicted in the chart refer to the supply of weaned calves. But those weaned calves won’t reach market for another six to 10 months so the increase in salable beef supply will be delayed another year. (From data we have thanks to age verification the average age at slaughter is 18 months and ranges mainly from about 15 to 21 months of age.) So what I call year two in the chart above becomes year three when we are discussing marketable beef supplies. This means that in year three of an expansion the increase in supply is a mere two per cent if the expansion rate is four per cent. It is a little over five per cent if the expansion rate is eight per cent per year and, surprisingly, supply increase has barely started, 0.3 per cent, if the herd expansion rate is 12 per cent. This is because it takes a huge draw on heifers to achieve a 12 per cent annual growth rate. Like a poorly tuned vehicle the engine stalls or chokes before roaring to life and we see in year four that the supply has surged 20 per cent.

Fortunately for several producers they started expanding their herds two or three years ago, they have already gained benefit from early expansion. But on an industry-wide basis there were an equal or greater number who have not yet begun to increase their herd size or have exited production because the national herd has not yet begun to grow. So as things stand now the industry is still at least three years away from being in a position to put any significantly increased supply into global markets.

Much has been said and written about emerging global opportunities for beef exports. Not enough has been said about the crucial role played by the ranchers and cow-calf producers who make the most basic decisions in this industry.

Charlie Gracey is an industry consultant

About the author

Contributor

Charlie Gracey is a beef industry analyst living in Ontario. More detail on this topic is available on his website at www.charlesgracey.net.

Comments

explore

Stories from our other publications