Canadian Cattle Move Across Borders for Feed

CANADA - Canadian cattle have been steadily moving onto American soils in order to get the necessary feed they require at the cost that farmers need.
calendar icon 10 April 2008
clock icon 2 minute read

Sources have said that, without well-planned preventative measures, the trend will continue due to the high cost of weight gain in Canada, together with poor returns for finished cattle, reports Trading Markets.

As of March 1, the Canadian feeder cattle population was 87% the size of the previous year, at 890,000 head, according to Rob Leslie, manager of CanFax, the statistics branch of the Canadian Cattlemen's Association.

Canadian feedlots have the capacity to feed 1.2 million cattle. He said the domestic numbers were down because more animals were going to the US due to that country's cheaper cost of production. Leslie expected the trend seeing more Canadian cattle move to the US for feeding would continue unless something "drastic" changes to the cost of gain between the two countries.

"These cattle float to the place where they're cheapest to feed," said Bryan Walton, CEO of the Alberta Cattle Feeders Association. According to the news agency Trading Markets he said other factors, including the strong Canadian dollar and poor incentives to grow feed grains, were also limiting the potential of the domestic feedlot sector. Walton said his organization was working on initiatives to help create both increased demand for Canadian fed cattle and increased supplies.

"I think we'll see a lot of cattle get fed in the States just because the cost of gain is less down there with corn compared to our barley prices here," said Blair Vold, manager of Vold, Jones & Vold Auctions in Alberta. He expected high canola prices in western Canada would lead to reduced barley acres in 2008, keeping feed prices higher in Canada.

In addition to the lower cost of gain in the US, there are also more companies competing for the finished cattle in the US, said Vold. The smaller competition in Canada means that finished cattle prices are relatively poor. Vold said current fat cattle prices, of 83 to 85 cents per pound were too low. "We need a fat market in the 90's to a dollar to keep the cattle market alive," he said.

Vold said the high grain prices were also starting to be seen in a reduction in the Canada's cow herd, with some producers looking to move pasture land into higher yielding field crops if they can, reports Trading Markets.

  • View the Trading Markets story by clicking here.
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