Canada’s beef cow numbers and slaughter activity will see contraction continue in 2019 but with the pace mitigated by reduced cow slaughter, growth in the calf crop and increased import activity, according to a report by USDA Foreign Agricultural Service Staff.
The staff, part of the Global Agricultural Information Network, said, the Canadian swine industry will look to rebound from 2018’s smaller pig crop and lower slaughter numbers. Stability of the Canadian swine herd this year will come from growth of the pig crop and sow retention.
Canada will continue to grow export activity to Asian-Pacific markets for beef and pork, the report said.
CATTLE AND BEEF
FAS/Ottawa revised its 2019 outlook with a slight contraction of Canadian cattle inventories on Jan. 1 to 11.420 million head, compared with the USDA’s official estimate of 11.525 million and the USDA’s official figure of 11.520 million for 2018.
Beef cow inventories were estimated down 1% at the beginning of 2019 to 3.661 million, compared with the USDA estimate of 3.680 million and the 2018 figure of 3.700 million.
Higher cow culling rates, a poorer calf crop, lower exports and higher-than-anticipated slaughter levels led to a greater contraction of the 2019 Canadian cattle herd in 2018 than anticipated, the FAS staff said. Canadian cattle numbers declined by 1% to 15.930 million head, compared with 16.050 million for the official USDA data.
Forecasts for the 2019 calf crop remain stable after strong 2018 numbers as higher reproductive rates return, the report said. These higher reproductive rates will offset the effects of lower beef cow 2019 beginning stocks.
LIVE CATTLE EXPORT ESTIMATES STABLE
Estimates remained stable for live cattle exports at 650,000, versus the USDA’s estimate of 660,000 and the FAS estimate of 2018 numbers at 650,000.
Canada saw a net loss in terms of feeder trade activity in 2018 as feeder export numbers fell to an estimated 650,000 head from the 663,000 seen in 2017. FAS staff said changing feed costs explained this changed export of feeder animals.
Current forecasts call for some drought activity in Western Canada this year, which could see those trends remain in place for 2019, the report said.
STRONG IMPORTS SEEN HOLDING
Import activity from Western Canadian feedlots was expected to remain strong in 2019 as sources suggested some feedlot owners have cornered a niche market by sourcing cheaper Holstein steers from the Western US, the report said.
Canadian packers reportedly were willing to accept these animals once they reached market weight while US packers reportedly were not interested, the FAS said. This was creating an opportunity for Canadian feedlots to source relatively inexpensive feeder animals.
As the US herd expansion cycle ends, Canadian feedlot owners may be less competitive bidding against conventional US beef feeder cattle, but Holstein steers could remain attractive as long as Canadian packers continue to accept them.
CATTLE, BEEF RECAP
Cash cattle trade was reported last week at $128, up to $130, per cwt on a live basis, up $2 from the bulk of the previous week’s action, and at $205 to $208 on a dressed basis, up $2 to $4 from most of the previous week’s trade.
The USDA choice cutout Tuesday was up $0.51 per cwt at $229.51, while select was up $0.26 at $218.99. The choice/select spread widened to $10.52 from $10.27 with 96 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Monday, was $142.04 per cwt, up $0.24. This compares with Tuesday’s Mar contract settlement of $142.75, up $0.57, and the Apr contract settlement of $146.22, up $0.02.