The number of cattle in Canada will continue to decline

The USDA this week reported that Canada's cattle population will continue to decline in 2021. Cattle exports are expected to decline while beef exports are expected to rise slightly. The United States will remain the leading market for both imports and exports of beef and pork from Canada.

Changes made by Statistics Canada have resulted in an upward adjustment in the starting cattle population for 2021. This is partly due to an increase in the number of cattle in 2020, an increase in the calf yield due to increased reproductive capacity, and an increase in imports. An additional factor in this adjustment is that cattle were kept on fattening longer due to interruptions in slaughterhouse operations due to COVID-19 in 2020.

Despite these changes, the trend towards continued decline in the number of cattle in Canada continues to persist. This decline has occurred since 2005 following an increase in herd numbers in the years immediately following bovine spongiform encephalopathy (BSE) in Canada in 2003.

While Canadian cow slaughter declined in 2020, this was mainly the result of processing disruptions. Canada has increased exports of culled cows to the United States and stocks of beef cows have not been restored as expected.

However, the herd of beef cows is relatively stable compared to the initial herd in 2020 after declining by 4% from 2019 to 2020. Early signs indicate heifer retention will improve in 2021, but that expectation is subject to weather and good grazing conditions throughout the year.

Statistics Canada has revised down its forecast for live cattle exports in anticipation of a decrease in the number of culled cows moving to the United States, as well as a decrease in the number of cows in general. Export demand for beef remained strong in 2020 despite many challenges. As the calf harvest remains relatively stable compared to 2020 volumes, this will support the stability of fattening numbers in Canada.

Canada will have additional slaughter capacity in 2021 compared to 2020 as the Ontario processing plant reopens under a new owner. The processing plant was closed in 2019 due to violations of the Safe Canadian Foods Act and Regulations, resulting in a reduction in cattle slaughter in Eastern Canada. The new owners are expected to resume operations at the facility in March 2021 and this is expected to increase bovine slaughter by 1,600 head in Ontario and Eastern Canada.