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What the latest Census tells us about Canada’s beef herd

Marketing with Charlie Gracey

The Canadian beef cow herd reached a new record high of 4.92 million head on July 1, 2003, less than two months after the discovery of BSE in a herd in Alberta. For present purposes, I regard the 2003 number as the all-time peak even though beef cow numbers were forced upward to 5.44 million head on July 1, 2005 and remained above five million until July 1, 2008. This increase after 2003 was a forced increase, however, as producers involuntarily retained their cows because of disastrously low prices caused by trade restrictions due to BSE. Culled cow and bull exports to the U.S. did not resume until 2007. So the claim that the national herd has lost 1.6 million cows since 2005 is numerically accurate but includes that forced increase. In a more practical sense the national herd has lost 1.1 million head since 2003. This remark is prelude to the following analysis of the 2016 census which reports cattle inventories up to 2017.

In his June editorial, Gren Winslow drew attention to the disparity between the recently released census numbers and the July 1, 2016 numbers. With regard to beef cows, the July 1 beef cow inventory stood at 3.8 million head while the 2016 census set the number at 3.7 million head. Which of these numbers is closest to correct? We don’t know and have no way of knowing since both are based on estimates which are themselves based on sampling.

In this analysis I am only concerned with beef cow numbers since all other kinds, (steers, heifers, calves, etc.) are direct derivatives of beef cow numbers. I will, however, insert this short comment on bull numbers just to get them out of the way. Because of the extensive use of AI in the dairy industry, 95 per cent of all bulls reported are beef bulls on beef farms. This per cent is highly stable and the actual number varies with changes in beef cow numbers.

So another way of looking at the number of beef cows is to ignore the cows themselves and count lagged steer marketings per 100 beef cows. (By lagged I mean relating steer numbers to the weighted average size of the beef cow herd one and two years previous). In the analyses that I have done, I find that the average number of beef steers marketed per 100 lagged beef cows since 2000 is 40.2 plus or minus 2.6 head. This presumes that I have properly accounted for the relatively small number of dairy steers in the slaughter mix. The relative stability of this number allows one to say that the industry produces about 40 to 41 beef steers annually per 100 lagged beef cows.

What is more important than the actual number of beef cows is the unmistakable long decline in the reported number of beef cows and the equally obvious long-term decline in the number of beef cow herds.

In this analysis there are some problems with the data. The number of beef cows and farms reporting are taken from the censuses of 2001 and 2006 and from 2010 onward the numbers come from the 2016 census. The missing years are 2002 to 2005, and 2007 to 2009, and I drew the beef cow numbers from the January 1 inventory estimates for those years and simply extrapolated the number of herds. I then calculated average herd size for all years. The apparent discrepancies represent the difference between census figures and January 1 beef cow number estimates.

The census shows that beef cow numbers have declined from 4.75 million head in 2003 to 3.8 million head in 2017. A decline of 950,000 head, or 20 per cent. A higher rate of decline is found when one calculates the decline from the 2007 peak of 5.28 million head but, as noted above, all of the growth in cow numbers between 2003 and 2007 was caused, not by deliberate herd expansion but by the forced reduction in cow culling.

  • The number of farms reporting beef cows has declined from 90,000 in 2001 to 63,066 in 2017, a decline of 26,934 herds or 30 per cent. The decline has been rather steady averaging a little over two per cent per year.
  • Beef cow numbers have declined 17 per cent from the pre-BSE peak in 2003. The decline since the forced peak in 2007 has been quite erratic and may reflect inaccuracy in estimates, such as the huge 14 per cent decline between 2009 and 2010. Nonetheless the overall decline in beef cow numbers since 2003 cannot be ignored.
  • As herd numbers declined there was some significant consolidation as average herd size increased to 62 cows in 2017 from 53 cows in 2001. As would be expected, average cow herd size increased during the years immediately after 2003 and peaked at nearly 65 head in 2007 and again in 2009, before adjusting downward in 2010 and then slowly growing to 63 head in the 2017. The abrupt spike in herd size in 2005 again reflects the forced growth following BSE.

The Provinces

The analysis for the provinces encompasses the years 2010 to 2017 inclusive.

As a benchmark, the Canadian industry in the past seven years:

  • Lost 16 per cent of its cow herds.
  • Lost nine per cent of its beef cows.
  • Average cow herd size grew from 57 to 62 cows.

ATLANTIC CANADA

  • Lost 15 per cent of its cow herds.
  • Lost 35 per cent of its beef cows (the largest per cent loss).
  • Average herd size grew from 20 to 26 cows (largest per cent increase).
  • Share of industry in 2016: producers eight per cent, cows 1.1 per cent.

QUEBEC

  • Lost 15 per cent of its cow herds.
  • Lost 18 per cent of its beef cows.
  • Average herd declined from 35 to 34 cows (the only province where herd size decreased).
  • Share of industry in 2016: producers eight per cent, cows four per cent.

ONTARIO

  • Lost 17 per cent of its cow herds.
  • Lost 11 per cent of its beef cows.
  • Average herd increased from 20 to 22 cows (the smallest average herd size).
  • Share of industry in 2016: producers 20 per cent, cows seven per cent.

EASTERN CANADA

  • Lost 18 per cent of its cow herds.
  • Lost 14 per cent of its beef cows.
  • Share of industry in 2016: producers 30 per cent, cows 12 per cent.

MANITOBA

  • Lost 17 per cent of its cow herds.
  • Lost 21 per cent of its beef cows.
  • Average herd increased from 67 to 71 cows.
  • Share of industry in 2016: producers 10 per cent, cows 11 per cent.

SASKATCHEWAN

  • Lost 15 per cent of its cow herds.
  • Lost seven per cent of its beef cows.
  • Average herd increased from 79 to 86 cows.
  • Share of industry in 2016: producers 22 per cent, cows 30 per cent.

ALBERTA

  • Lost 14 per cent of its cow herds.
  • Lost six per cent of its beef cows.
  • Average herd increased from 76 to 84 cows.
  • Share of industry in 2016: producers 31 per cent, cows 41 per cent.

In practical terms, the Saskatchewan and Alberta experience since 2010 is identical.

BRITISH COLUMBIA

  • Lost 13 per cent of its cow herds.
  • Lost six per cent of its beef cows.
  • Average herd increased from 40 to 45 cows.
  • Share of industry: producers seven per cent, cows five per cent.

WESTERN CANADA

  • Lost 15 per cent of its cow herds.
  • Lost eight per cent of its beef cows.
  • Share of industry: producers 70 per cent, cows 87 per cent.

The most salient observation at the end of the second quarter of 2017 is that there are no signs of herd expansion and indeed it is certain the cow herd has continued to shrink. Though solid information on sex of exports may not be available until year-end it appears now that heifer slaughter, including slaughter heifer exports, is up at least eight per cent. Meanwhile cow slaughter is up 16 per cent domestically, but sharply lower exports has total cow slaughter essentially unchanged from a year ago. The picture is pretty clear. Cow-calf producers continue to maintain a low cow culling rate while selling off a higher proportion of their heifers.

This pattern is worryingly consistent and suggests some, or many, producers intend to exit the industry.

It is now obvious that any future growth in supply now depends on a higher rate of weaned heifer retention in the fall of 2017. Even if that happens their marketable offspring will not reach market until 2020.

This is one of the most significant and least appreciated realities about the industry and its future prospects. The commercial cow-calf herd is the foundation of the entire industry and its long and continuing decline should be a matter of the most urgent importance to industry leaders. The current situation is clearly unsustainable.

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.

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