North Dakota State University -- NDSU Agriculture Communication
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October 16, 2003

 

Market Advisor: Comparing U.S. and Canadian Cattle Numbers

By Tim Petry, Livestock Marketing Economist
NDSU Extension Service

Since Bovine Spongiform Encephalopathy (BSE), called Mad Cow disease, was confirmed in a cow in Alberta, Canada, in May, much attention has focused on Canada’s cattle situation. So, how do cattle numbers in Canada compare to those in the United States?

According to USDA National Agricultural Statistics Service ( www.usda.gov/nass ), the inventory of all cattle and calves in the United States on July 1 was 103.9 million head, 1 percent below levels in 2002 and 2 percent below those in 2001. Cattle numbers in the United States have fallen for seven straight years due to drought conditions in several regions of the cattle-producing area.

In contrast, according to Statistics Canada ( www.statcan.ca ), the inventory of cattle and calves in Canada on July 1 totaled 15.728 million head, which was 2 percent larger than 2002 and a record high number.

Record high cattle numbers in the United States occurred back in 1975 at 132 million head.

Canada’s cattle herd is only 15 percent of the size of the US herd and about equal to the number of cattle in Texas. On July 1 Texas had 15.5 million head compared to the 15.7 million head in Canada. About the same number of cattle could also be found in five combined Northern Plains states of North Dakota, South Dakota, Minnesota, Montana and Wyoming.

Beef cow numbers totaled 33.6 million head in the United States, 4.9 million in Canada, and 5.9 million in Texas. The Canadian province with the most beef cows was Alberta with almost two million followed by Saskatchewan with 1.3 million.

Cattle numbers fell in Alberta, in contrast to other cattle producing provinces, because of drought conditions and dwindling feed supplies. Beef cow numbers in Alberta declined 50,000 head, but Saskatchewan numbers increased 65,000. Together, those two provinces have close to 70 percent of Canada’s beef cow herd.

Several Northern Plains states have cow numbers similar to Saskatchewan. Beef cow numbers in North Dakota are at 973,000 head, with about 1.7 million in South Dakota and 1.4 million in Montana. Cow numbers in those states have been falling due to abnormally dry weather conditions.

According to CanFax ( www.canfax.ca ) there were 488,183 cattle on feed in Alberta and Saskatchewan on Oct. 1. That is a steep decline from the 724,797 on feed in 2002, and 928,253 in 2001.

Drought conditions last year caused a severe reduction in the feed barley crop, the primary grain fed to cattle in Canada. Therefore, fewer cattle were placed on feed.

In 2001, Canadian feedlots purchased feeder cattle from the Northern Plains of the United States to satisfy the growing feedlot industry there. An interesting question for the longer term is how the BSE incident and lower Canadian cattle prices have affected the equity position of Canadian feedlots. When favorable weather returns and the BSE situation subsides, will Canadian feedlots again expand and demand U.S. feeder cattle?

U.S. cattle on feed numbers for October were not yet available when this article was written (the report will be released on Oct. 17), but 9.83 million head were on feed on Sept. 1. The number was 3 percent below 2002 and 9 percent below 2001, due to smaller calf crops in the United States.

So, the number of cattle on feed in Alberta and Saskatchewan is only about five percent of the number being fed in the United States. In contrast to the 488,183 cattle on feed in Canada, four U.S. states each had more cattle on feed. Texas led the way with 2.7 million followed by Kansas with 2.3 million, Nebraska with 1.7 million and Colorado with 900,000.

Canada’s beef cattle industry is very dependent on the export market. Normally, Canada exports a number of cattle roughly equal to about 25 percent of its calf crop and more than 50 percent of its beef production.

Due to the ban on any Canadian live cattle exports since May, and only lately, limited movement of beef to other countries, prices have suffered. Prices for cattle in Canada the week before the BSE announcement were just slightly lower than U.S. prices. Now, they are much lower.

For the week ending May 16, 500-600 pound feeder steers in Alberta averaged $102.56 (U.S.) per hundredweight, compared to $104.90 at North Dakota and South Dakota auction markets.

Fed steers, mostly select 1-2, in Alberta averaged$78.40 (U.S.) compared to direct choice steers in the United States averaging $80.25. Cull cows, cutter and utility, at Ontario auctions averaged $ 44.91 (U.S.) compared to cows at Northern Plains auctions averaging $45.

For the week ending Oct. 10, 500-600 pound feeder steers in Alberta averaged $82.94 (U.S.) per hundredweight; compared to $112.89 at North and South Dakota auction markets.

Fed steers, mostly select 1-2, in Alberta averaged $55.13 (U.S.) per hundredweight compared with direct, choice steers in the United States at $96.07. Cull cows, cutter and utility, at Ontario cattle auctions averaged $12.55 (U.S.) compared to $47.50 at Northern Plains livestock auctions.

A question on most livestock producers minds is when will the U.S. border open for Canadian cattle to enter the United States. The price differential that now exists could cause significant numbers of cattle to flow this way.

U.S. Secretary of Agriculture Ann M. Veneman recently stated that proposed rules for allowing cattle under 30 months of age to enter the United States may be published in the Federal Register within the next month. A public comment period of 30 to 60 days after that is likely.

Therefore, Canadian cattle will likely not be allowed to enter the United States until sometime in 2004. The exact date in unknown and will depend on the proposed rules and how public comment may ultimately affect them.

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Source: Tim Petry, (701) 231-7469, tpetry@ndsuext.nodak.edu
Editor: Tom Jirik, (701) 231-9629, tjirik@ndsuext.nodak.edu