Tuesday, August 31, 2004

SPOTLIGHT: Cattlemen in crisis

Biggest cattle herd ever

Canadian cattlemen have more livestock on their farms than ever before, a little over a year after the discovery of mad cow disease prompted the United States and about 30 other nations to restrict beef imports.

As of July 1, 2004, the Canadian cattle herd had hit an all-time high of 16.8 million head, up 6.5%, or 1 million head, from the same time last year.

This increase occurred largely because of the collapse of export markets for live cattle.

Herd sizes rose in all provinces. The herd surged 10.0% in Manitoba, the largest increase, while Saskatchewan's went up 9.9%, and Alberta's rose a more modest 4.9%.

Western Canadian farmers account for three-quarters of the national herd. Alberta alone represented 38%, or 6.4 million animals, as of July 1, 2004.

Single reported case

The ban on Canadian beef followed the disclosure of a single reported case of bovine spongiform encephalopathy (BSE), or mad cow disease, on May 20, 2003.

The border remained closed to all Canadian beef exports until September 2003.

At that time, the United States, followed by a number of other countries, agreed to allow imports of Canadian boneless beef from animals younger than 30 months under a permit process.

Subsequently, on December 23, 2003, a dairy cow in Washington State tested positive for BSE. Its origin was traced to northern Alberta.

The United States is still thinking about whether it will reopen its border to live cattle. About 84% of Canada's beef exports are destined for American dinner plates.

In dollar value, for 2002 as a whole, total cattle and beef exports reached $3.9 billion, the equivalent of $11 million in sales a day.

From June 2003 to May 2004 following the border closure, the total value of cattle and beef exports was an estimated $1.4 billion, down 65% from the 2002 benchmark.

Slaughter cattle

Prices for all cattle – slaughter animals, feeders as well as calves – tumbled because of the domestic oversupply resulting from the plunge in exports.

Prices for slaughter cattle were hardest hit. The July 2003 price for slaughter cattle in Alberta was about 35% of the price before the borders closed.

It has struggled upward since then, and in March amounted to 76% of prices last seen in the spring of 2003. This collapse was mirrored across the country.

Farmers' cash receipts for cattle and calves during the third and fourth quarters of 2003 were cut in half.

Government payment programs have helped cushion the shock. The main program, Bovine Spongiform Encephalopathy Recovery Program, paid an estimated $443 million to producers between July and December 2003.

Meanwhile, American farmers are enjoying record prices. A decline in the US herd, coupled with the border closure and strong beef demand, tightened the beef supply south of the border.

For more information, contact Robert Plourde (613-951-8716), Agriculture Division.

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© 2004, Statistics Canada.