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Canada's cattle herd to hit 28-year low, as it fails to lure young ranchers

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Canada's cattle herd is poised to reach its smallest in 28 years, thanks to the reluctance of a new generation of ranchers to enter the industry – but the pork sector is poised to set fresh export records.

The US Department of Agriculture's Ottawa bureau, in its first forecasts for 2018, said that while a return to expansion in the Canadian cattle herd had been "highly anticipated for several years", it was "unlikely to occur" before 2019 at the earliest.

"At present, Canada does not appear to be retaining sufficient numbers of heifers" to fuel herd growth.

In part, the trend reflects the spike in fed cattle prices earlier this year, which fuelled 12% growth in Canadian heifer slaughter in the first half of this year and a 16% surge in cow slaughter.

Retiring ranchers

However, the bureau flagged too the impact of an ageing population of Canadian cattle producers, who were often not being succeeded by younger farmers, a trend which the likes of the United Nations have flagged in many agricultural sectors worldwide.

"Canadian cattle farm numbers have continued to contract as ranchers retire out of the industry without a successor," the bureau said.

While a drop of 17% in cattle farms since 2010, and 35% since 2005, was down in part to consolidation, "the loss of farms continues to outpace the rate of growth in cattle per farm, dragging down the size of the total cattle herd".

The herd will, by the end of next year, have shrunk by 22% from its 2005 high of nearly 15m head.

Beef vs pork

Beef production, meanwhile, will at 1.16m tonnes be down 23% from a high actually reached in 2004.

Since 2004, US beef output has risen by 6.8%, and Brazil's production by 10.6%.

However, Canada's pork output will in 2018 grow by 40,000 tonnes to 2.0m tonnes to set a record for a fourth year running, the bureau said, helped by continued investment in hog production.

The country's overall hog herd will top 14.0m head for the first time this year, and grow further to 14.23m head by the end of 2018.

'New barn construction'

The bureau flagged the extra incentive provided by the opening in the US two weeks ago of the Clemens Food Group slaughter plant in Michigan, with a capacity of 10,000 head per shift, and the Triumph-Seaboard facility in Iowa, with capacity of 12,000 head per shift – both of which are seen within range of Canadian hog exports.

The new plants may create "incentive [in Canada] to push forward with new barn construction in 2018 to increase farrowing operations and supply of weanlings for export to the US".

Furthermore, the bureau reported information from "industry sources" that Canadian meat processors Olymel and HyLife "have continued moving towards a vertical integration model", ie boosting hog production, "while expanding their processing capacity" too.

Record exports

Canada's increasing pork output will drive its shipments to a record 1.45m tonnes in 2018, a rise of 70,000 tonnes year on year, and defending the country's place as the third-ranked exporter, after the US and the European Union.

The bureau flagged "continued strong demand from key Asian markets", with Canada's shipments to Japan up 12.3% in the first half of this year, to the Philippines up 47% and t5o Taiwan up 93.5m tonnes, more than offsetting declines to the Chinese market.

By Mike Verdin

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