Kylee Pedersen | CBC News | Posted: September 10, 2024 8:43 AM
It's been a rough stretch for many Canadian ranchers, with drought, pandemic-rattled supply chains and soaring feed and fuel prices taking a toll on those who raise their herds on the Prairies.
Now, recent numbers from Statistics Canada provide some insight into the depth of those impacts, as operators opted to cull their herds in the face of shrinking profit margins.
The figures show that the number of cattle in Canada has dwindled to the lowest level since 1987.
The Canadian cattle herd fell 1.4 per cent from last year on July 1, to 11.9 million head, with beef cattle taking an even harder hit, dropping 2.2 per cent. It's the third year in a row the federal agency has recorded a decline in cattle numbers.
For the ranchers still left in the business, the low supply could provide them an opportunity to capitalize on high beef prices, if they can afford to stay in the game. And Alberta's beef game is by far the biggest in the country.
According to 2023 Statistics Canada numbers, Alberta accounted for 44 per cent of the national herd, followed by Saskatchewan at 29 per cent.
Nationally, the beef industry contributed $24 billion to the GDP from 2020 to 2022, according to CanFax, a division of the Canadian Cattle Association, which tracks market data.
For consumers, a shrinking herd means prices at the grocery store will likely continue to rise.
"I've been tracking cattle for, you know, 30 years, and I've never seen demand so great as in the last few years," says Kevin Grier, a livestock market analyst.
The price of a steak on a shelf isn't indicative of how much farmers are taking home at the end of the day, though. If this is the bottom of the curve before herds start to stabilize, as some economists suspect it could be, a number of factors will need to line up just right.
The first of those is ongoing weather conditions, says Brenna Grant, the executive director of CanFax.
Grant points to year-over-year drought as the main cause of the continued liquidation of herds.
She said this May marked a turning point in that pattern, as rains led to a pause in farmers selling off cattle, a trend that continued throughout the summer.
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That stall in marketing is a good sign the industry is heading in the right direction, said Grant, but it doesn't guarantee cattle numbers will be maintained throughout the upcoming year.
"Just stopping selling off the cowherd is not enough in and of itself. You also need them to be replacing those with breeding heifers," said Grant.
She predicts the main determinant of what farmers choose to do with their herds this year will be feed availability.
"That really depends on what hay production was this summer and what harvest is like this fall."
Some farmers have hope on that front.
