Growing Canadian beef production a drag on prices

Administrator Tue 12 Jul, 2016

Like its larger neighbour to the south, the Canadian beef industry has been producing more beef in 2016 than in 2015, with a combination of more cattle slaughtered and much heavier carcases, on average. The difference between the two countries, however, is that US feedlots have become much more current in recent months, while Canadian feedlots remain well-stocked. NB. “Currentness” refers to the availability of finished cattle in feedlots – when there are lots of finished cattle, the sector is “uncurrent”.

Canfax reports that the number of cattle on feed in Canada at the beginning of June was 3.8% higher than a year ago. Further to this, the number of cattle that have been in feedlots for over four months was 11.8% higher than the year before. This suggests plenty of finished cattle ready to be processed in the near-term, with plenty of feeder cattle still to be placed in feedlots in the second half of 2016. The market appears to be favouring buyers rather than sellers at present.

So far in 2016, Canadian cattle slaughter is up 2% on the same time last year, with a significant rise in average carcase weights increasing the total volume of beef produced. Beef production is up 8% for the year-to-date. Exports have increased as well, but the majority of the extra beef has remained in Canada – Canfax estimates almost an additional kilogram of beef per person, requiring either a big jump in exports or a reduction in carcase weights to keep beef prices up through the year.

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