The following article is from the New Brunswick Business Journal:
Cattle inventories have hit their lowest mark in more than a decade, according to Statistics Canada.
As of July 1, estimated cattle holdings had hit their lowest since 1994, the statistics agency said.
By steadily reducing the supply of cattle after fears surrounding mad cow disease kept producers from selling their livestock, farmers are starting to see a recovery in the price of beef, says Brian Perillat, a senior analyst with the Canadian Cattlemen’s Association.
Faced with large herds, a slumped market and the increasingly expensive cost of feed, farmers have been liquidating fairly significant parts their herds since 2005, and not replacing their cows, Perillat said.
Constricted supply has lead to a “dramatic improvement” in the price farmers can fetch, he said.
While the dairy farmers have kept their herds largely steady, beef producers have seen a big improvement as their herds shrunk in size.
Perillat said prices for steers are more than 40 per cent higher than what they were two years ago.
Two years ago, he said, farmers were getting around $1 per pound on a 600-pound calf. Now, they’re getting closer to $1.40, he said.
As fears over BSE subside and markets recover, the industry has seen a slowdown in herd liquidation over the last few years. But Perillat said livestock inventories are likely to keep declining.
“We’ve been back in 1990s levels for over the last year,” he said. “Supplies look like they’re going to continue to shrink for a year or two.”
He said it’s a good sign for prices, although the volatile commodity market of beef could still cause a drop in prices.
As of January 2011, New Brunswick was home to 21,000 beef cows and around 18,000 dairy cows, said Gisèle Regimbal, spokeswoman for the provincial Department of Agricultire, Aquaculture and Fisheries.
The beef industry, which Regimbal said supported 548 farms according to data from 2006, accounted for nearly $19 million for New Brunswick farmers in 2009.
Atlantic Canada farmers had nearly 240,000 cattle on their farms as of July, the only region not to see a springtime boom from calving.
While most provinces saw an increase during the first six months of the year, Atlantic Canada has seen a dip of a little more than one1 per cent since January.
Rinnie Bradley, executive director of the Cattlemen’s Association and a member of the Maritime Beef Council, said a possible reason is the high price for cull cows, or older animals.
When prices are down, farmers will hang onto the cull cows, which might produce a few more calves.
But high prices are encouraging farmers to sell the animals, she said.
“They’re getting a fair price for those cattle,” Bradley said. “They’re down one less breeding animal and one less calf.”
Those cattle not sent directly to butcher have been auctioned in Ontario or Quebec, Bradley said.
However, the higher price brought about by low inventory may not mean a bumper year for producers.
“Prices are improving, but high prices don’t guarantee profitability,” Perillat said.
Source: New Brunswick Business Journal
Posted by Haylie Shipp