According to the Alberta Beef Producers annual report, increasing domestic slaughter capacity is more critical to the Canadian beef industry than a return to normal trade with the U.S. The group says in the long run, keeping the border closed would help Canadian producers by decreasing the reliance on the American market.
That's a notion NOT shared by many others, including U.S. producers and packers who in the past relied on Canadian imports to stabilize supplies. In fact, USDA numbers out this week show how the absence of Canadian beef has impacted production trends in the U.S.
The semiannual report showed the total for all cattle and calves as of January1 stood at 101 percent of year-ago levels. The calf crop was at 99 percent of previous year totals.
Analysts said the increase in total herd size was due, in part, to reduced slaughter rates by beef packers. Domestic kill levels in 2004 dropped by some 2.7 million head of cattle as the ban on imports of live Canadian cattle forced packers to protect supply.
Cattle numbers peaked with the January 1996 inventory, which showed a total population of 103.5 million head. The nine-year slide in cattle numbers, pushed along by the extended drought in the Western U.S., bottomed out last year at 94.9 million head. Friday's report showed a domestic herd of 95.5 million.
Traders said they did NOT expect the report to have an immediate impact on cattle prices; more on that in our upcoming market analysis.