COOL’s repeal might increase cattle exports

Prime Cuts with Steve Kay, from the March 2016 issue of Canadian Cattlemen

A big question facing Canadian livestock producers this year is whether December’s repeal of country-of-origin labelling for beef and pork will encourage more livestock exports to the U.S. Initial analysis suggests they will increase. USDA forecasts that hog shipments might increase nine per cent this year from 2015 to 6.2 million head. This though would be well below the 10 million hogs that headed south in 2007.

Cattle shipments might increase as well. The Canadian Cattlemen’s Association believes exports might climb to one million head from last year’s 755,969 head (a USDA total). But there are several factors that suggest shipments might remain modest compared to the peak years.

Related Articles

First, Canadian cattle numbers have remained flat the past two years, around 11.9 million head. That’s against 12.2 million to 12.3 million head in each of the previous three years. Canadian producers appear to have far less appetite to grow their herds than U.S. producers. This has meant that feedlots and packers, especially in Western Canada, have strived to keep as many cattle from going south as possible. Last year saw only 281,591 feeder cattle go south and even fewer slaughter steers and heifers (196,243 head). Exports of slaughter cows in fact surpassed steers and heifers at 197,567 head.

Response to COOL’s repeal, at least at the start of this year, was mixed. The first three weeks saw only 3,060 feeder cattle go south, versus 19,360 head the same weeks last year. But 15,836 steers and heifers went south, versus 10,344 head last year. Bad weather and poor feedlot conditions in much of the U.S. likely led to the slow start in feeder cattle shipments. But they might not pick up much, as the U.S. had 25.912 million feeder cattle and calves outside feedlots on January 1, up a whopping 1.309 million head from a year earlier.

This reflected low placements but also a U.S. cattle population that grew 3.2 per cent in 2015 to 91.988 million head on January 1. Cow-calf producers thus expanded their beef cow herds for the second year in a row. They had wanted to expand for some years because of favourable per-cow returns. But drought from 2010 to 2012 ravaged pastures from Texas to Missouri. However, much of the impact of the drought had disappeared by 2014 and producers responded to record-high returns.

Producers last year increased their herds primarily through more beef cows. That number on January 1 totalled 30.331 million head, up 1.029 million head or 3.5 per cent on last year. The number of beef replacement heifers totalled 6.285 million head, up 199,000 head or 3.3 per cent. USDA notably upwardly revised its January 1, 2015 beef replacement heifer total, which meant producers retained heifers more aggressively in 2014 (up by 535,000 head from 2013) than in 2015. The 2015 U.S. calf crop totalled 34.302 million head, up 780,000 head or 2.3 per cent, and will grow even more this year.

Canada needs to expand its herd for its new National Beef Strategy to be successful, says CCA president Dave Solverson. Part of the Canadian industry’s competitiveness relies on its existing infrastructure. Yet more live cattle exports to the U.S. are going to squeeze domestic supply at home and that could put pressure on Canadian processing plants, he says. Additionally, Asian markets love Canadian beef but reliability of supply has been a problem. Solverson would like to see the Canadian cow herd rebound to five million head from its current total of less than four million head. He doesn’t offer a time frame for this but a 25 per cent increase even over 10 years might be a tall order.

About the author

Contributor

A North American view of the meat industry. Steve Kay is publisher and editor of Cattle Buyers Weekly.

Comments

explore

Stories from our other publications