Livestock numbers on the decline
According to numbers from Statistics Canada, figures from 2007 indicate Canada's cattle herd and hog inventories were on the decline, as a result of continuing border issues with BSE in cattle and higher feed prices and a high Canadian dollar in hogs.
February 21, 2008 By Statistics Canada
February 18, 2008
OTTAWA -Canada's cattle herd continued to decline during 2007, as exports to the United States accelerated. The year 2007 marked the second full year that the border has been open to Canadian cattle shipments since 2002.
As of January 1, 2008, cattlemen reported 13.9 million head on their farms, down by 210,000 head, or 1.5%, from January 1, 2007, according to the annual January Livestock Survey of 10,000 producers.
In January 2005, a record year, there were almost 1 million more cattle held on Canadian farms as closed borders forced producers to keep much of their farm stock off the market. Despite the decline, the January 1, 2008 inventory was nevertheless 479,000 head above the level as of January 1, 2003, prior to the border closure.
The US border, closed after May 20, 2003 following the disclosure of a case of bovine spongiform encephalopathy (BSE), was reopened to live cattle under 30 months of age on July 18, 2005. On November 19, 2007, it was opened to cattle born after 1999. Even with an open border, farmers continue to face different but rigorous challenges.
In general, inventories in the West rose during the early 1990s as farmers increased production in response to expanding export markets. With the closure of the US markets, thousands of cattle were held back on Canadian farms.
The Livestock Survey also showed declines in both hog and sheep inventories during the year. Hog producers indicated they had 14.0 million head as of January 1, 2008. Farmers reported 825,300 sheep on their farms, down 6.1%.
Canadian hog inventories plunged during 2007 as a strong dollar and high feed costs challenged producers. According to the 2008 January Livestock Survey, there were 14.0 million hogs on farms at the first of the month, 897,000 fewer than on the same date in 2007. This is down 6.0% from 2006 and is 2.4% lower than October 1, 2007.
Prices for slaughter and export hogs, largely determined in the United States and adversely influenced by a strengthening Canadian dollar, weakened during the second half of 2007. Although variable, feed grain prices surged more than 50% in 2007.
The financial pressure on hog producers can be highlighted using a calculation that divides the hog price by a feed cost. The higher the ratio, the better the situation is for hog producers. By November 2007, the Ontario hog-corn ratio was 9.9, well down from 22.4 in 2006 and considerably lower than the 10-year average of 20.8. The hog-barley ratio in Alberta showed a similar plunge.
Farmers continued to export hogs to the United States at a record pace, reaching 9.9 million during 2007. This surpassed the previous record established in 2006. Over two-thirds of exported animals were younger hogs, called weaners, destined for feeding in the United States. At the end of 2007, with feeding costs on the increase, the weaner export market remained relatively attractive to Canadian farrowing producers.
Domestic slaughter has continued to decline after reaching a record high in 2004, consistent with soft domestic demand for pork, lower prices paid to producers and higher feeding costs. Hog slaughter dropped 2.4% between 2006 and 2007.