BARRHEAD – Brian Perillat with the More than Just Feed organization attended the Alberta Feeders Association annual general meeting and shared data analytics with farmers at their last meeting.
“Prices, they are beyond expectations. They've been extremely strong here,” stated Perillat.
“When I read marker reports daily around the U.S. market, there is speculation with a new president coming to the U.S.”
Perillat talked about 2014-2015 when there was a big dip in production.
The United States Department of Agriculture reported cattle and calves inventory was down two percent from 2023 as of Jan. 1, 2024 totaling 28.2 million beef cows.
The data on their website shows a continued decrease in inventory since 2019 with the 2024 numbers showing less than the inventory drop that occurred in 2014 in the US.
Ten years later and now the cattle numbers are the lowest numbers seen in the U.S. since 1960 and Perillat said the numbers will get smaller.
Canada is seeing the lowest cattle numbers since the late 80s according to Perillat.
Despite these lower cattle numbers the beef industry continues to do a great job from efficiency.
“Come January 1, 2025, we're projecting a continued drop in production in the U.S. despite the strong prices,” shared Perillat.
In 2014- 2015 there was a lot of beef production but that is not really the same as the supply. In today’s market production might be less but there was more beef being exported than imported. We do import cattle each year from the U.S.
Alberta has been exporting 50% of our beef and cattle production.
Perillat explained that over 70% of beef exports go to the U.S.
The U.S. Department of Agriculture (USDA) reported that for October 2024 Canada exported 64,011 cattle for immediate slaughter to the U.S.
Canada also exported 19,521 cattle and calves for feeding and 1308 cattle for breeding.
The total number of cattle exported to the U.S. for October 2024 was 84,840.
Interestingly Mexico exported 116,442 cattle to the U.S. for the month of October 2024.
During the same month the U.S. exported 31,475 cattle to Canada.
That translates to between 600,000 to 1.2 million head of cattle exported to the U.S. each year for slaughter.
Alberta provides 40% of that inventory according to the Government of Canada website.
Perillat pointed out that we're importing piles of feeder cattle, up to 300,000 annually in fact.
The Government of Canada reported 11.9 million in cattle and calf inventory for Jul. 2024 as stated on their website.
There are really three things that drive the price in Canada if you look at what drives the beef prices.
Those three things are Cattle futures, the worth of the Canadian dollar, and the Basis, which is the spread between Canada and U.S. market.
Canadian cattle prices are at a pretty large discount and there could be further discounts with tariffs according to Perillat.
The question is what changes if any will President Trump make or will he stand by his promise to implement a 25% tariff on imported goods to the US.
There are things working in our favor. The average beef consumption per person in the U.S. was 54.3 pounds in 2024.
The forecasts by Statista.com project the consumption numbers to increase to 56.9 by 2033.
Canada’s beef consumption per person in 2021 was 26.1 kilograms (57.5 pounds).
Demand for beef products is there.
Affordability may come into question and Perillat reminds us that you can buy a lot more pork for the same price.
Today the beneficial points are that there is increased consumption and record high beef prices.
What is important to note is that the capacity of processing levels in Canada from the 2014 2015 until the 2022 has increased where we added over 30% more cattle in Western Canada.
Perillat pointed out another trend.
In the past we usually ship the cattle to the feed and now we are shipping feeder cattle instead.
In other words, we are exporting feeder cattle to where they have cheaper feed. Now we are importing feeder cattle to Canada and importing corn.
Canada was the eighth largest beef exporter in the world in 2023 according to Statista.com.
