Canadian beef cow herd continues to decline
The ongoing contraction of the Canadian cattle herd is expected to continue in 2022. Canadian live cattle exports are forecast to decline on a smaller calf crop. High feed costs and limited availability will see live exports outpace 2021 through the first half of 2022. Imports of US feeder cattle will decline in 2022 following five years of record imports. Feed availability in Western Canada and competition for feeder animals due to contraction in the US cattle herd will drive this trend, according to a USDA's FAS report.
The trend of sustained contraction of the Canadian cattle herd continues to be maintained and FAS/Ottawa has revised the 2022 forecast for calf crop and slaughter downward. The 2021 calf crop was lower than originally estimated as was slaughter leading to official ending inventories reported by Statistics Canada as slightly over b100,000 head higher than estimated. The beef cow herd continues to decline as producers in Western Canada are challenged by high feed costs, limited feed availability, and extreme drought conditions resulting in poor pasture conditions. FAS/Ottawa has revised the forecast 2022 calf crop down slightly. Poorer feed conditions are anticipated to impact reproduction rates as having potential to lead to greater losses during the 2022 calving season.
Live cattle imports are revised further downwards given the feed shortages in Western Canada. Significant drought concerns remain for 2022 in many regions of Western Canada and, given feed costs and logistical challenges in transporting feed, this will not support another record year of U.S. live cattle imports. Contraction in the US herd will also increase feeder competition for those animals. For 2022, analysts are expecting US to remain the biggest trade partner for Canadian beef producers.
Different sources report that the major processors are no longer targeting exports to the EU market as result of additional requirements and a lack of progress on technical challenges, such as approval of certain carcass washes. Some smaller processors may still ship to the market but Canada has been unable to realize significant growth in the EU
market despite the Comprehensive Economic and Trade Agreement (CETA), and the CETA-quota continues to be minimally filled.
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