Beef Cattle by Census Division, 1996

The North American Beef Market: Competition Keeps it Lean

by Robert Plourde, Statistics Canada

Every time you enjoy some beef from the family barbecue, you affect the Canadian beef industry. The Canadian beef cattle herd has increased over the last decade and the North American and Asian appetite for burgers and steaks is what's behind all that beef.

Live cattle and beef are traded every day on North American markets. In 1996, Canadian exports of cattle and beef accounted for $2.1 billion, the second single largest agricultural export product after wheat ($4.7 billion). A surplus of coarse grain in one region, a shortage of ground beef in another, bad pasture conditions in a third, or a shift in demand for beef in Asian countries are some of the day-to-day events that affect producers' decisions and beef production across North America.

Beef Gets Around

Not that long ago, most cattle were born, raised and fed on the same (usually small) farm, alongside hogs and poultry. Although beef cows and their calves are often still side enterprises on other types of farms, often to use otherwise marginal land, the market for finishing beef to market weight has become specialized. Beef production in Canada has become more streamlined and efficient as producers specialize in one part of the production cycle (Figure 1).

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Figure 1. The Beef Cycle Becomes More Specialized

Although 72% of the cow-calf farms are in Western Canada, Eastern Canada is still an important meat producer and represents most of the Canadian beef market. Beef cows outnumber dairy cows in every province except Quebec and Newfoundland and Labrador. About 3900 of Canada's 33 500 dairy farms have beef cows as well as dairy cows, but in fact all dairy farms produce beef through the slaughter of culled dairy cows and calves. Mixed dairy and beef operations account for less than 3% of the beef cow herd in Canada.

"Cow-calf" operations (91 600 census farms) produce primarily weaned calves. Most beef calves-90% to 95%-are born in the spring and raised on the cow-calf farm all summer. Cows and their calves, particularly in Western Canada, are moved to pastures or grazing land near the farm. After a summer in the field with the cows, the calves are usually moved to feed operations.

Calves not kept on the cow-calf operation as breeding cattle will be purchased by one of the cow-calf stocker operations or feedlots in Canada. Cow-calf stocker operations are larger than the cow-calf farms on average, and feedlots are twice as large again.

Calves on cow-calf stocker operations are fed a low-energy roughage ration (forage or silage) in winter and spend the next summer as yearlings on pasture where they continue to grow, but not to a size considered slaughter weight. These operations are also referred to as backgrounding-stocker or feeder-stocker operations. The yearlings are sold to feedlots during the second year of their lives.

Feedlot operations specialize in "finishing" cattle, mostly steers and heifers, to market weight on a high-energy ration. In Eastern Canada cattle are finished predominantly on grain corn and silage; in Western Canada it is barley and hay.

Before winter, cow-calf operators can consider selling their weaned calves (called feeders) at auctions. Producers may also consider holding all or some of them to the next year when they can sell them as yearlings. Whether or not they sell them as feeders or yearlings depends on many factors: if they have the facilities to keep them, current prices, the cost of the grain to feed them to yearling size, how much feed they have on hand, how much they can expect to get per head at slaughter weight, and the number they can or expect to keep for breeding.

Specialization, and the tendency to use marginal land to raise beef cattle, has made beef production very cost effective in Canada.

Slaughter Concentrated Among a Few Plants

The slaughter sector has undergone major structural changes in the nineties. Today the top four slaughter and processing plants account for 70% to 75% of the total slaughter, compared with 53% in 1992. Economies of scale are important in this sector. Plants are moving towards round-the-clock operation and if they don't operate near full capacity, the fixed cost per head of cattle slaughtered can be high.

Cattle are sold for slaughter through auctions, some at stockyards and some "virtually" through electronic auctions. At electronic auctions, sellers provide a description to potential buyers, who can bid and complete a transaction online. Agents for the electronic markets arrange shipment of the cattle to the buyer. In Western Canada, 95% of all feedlot cattle are sold direct to packers. In Ontario the figure is 60%, in Quebec 50%. The beef is then packed and shipped to supermarkets-en route to your summer barbecue.

DATA FOR THIS ARTICLE CAME FROM THE CENSUS OF AGRICULTURE 1971-1996; THE AGRICULTURE DIVISION OF STATISTICS CANADA (LIVESTOCK AND ANIMAL PRODUCTS SECTION); AND THE RED MEAT SECTION, MARKET AND INDUSTRY SERVICES BRANCH, AGRICULTURE AND AGRI-FOOD CANADA.

The Northwest Cattle Project Keeps those Dogies Moving

An agreement between Canada and the United States known as the Northwest Cattle Project (recently renamed the Restricted Feeder Program) allows easier trade between the two countries by allowing animals to be imported into Canada without testing, from any U.S. state free of disease. (Canada is free of a number of animal diseases found in the United States, such as bovine brucellosis, tuberculosis and bluetongue. Cattle infected with bluetongue, a disease transmitted by insects, show no symptoms, but can pass the disease to sheep.) Montana and Washington, for example, are eligible to export cattle to Canada as feeder cattle under the agreement, although any state that can demonstrate equivalent health status can export animals into Canada.

The Canadian Cattlemen's Association proposed the Northwest Cattle Project in 1995 to promote trade of live feeder cattle between Canada and the United States. The regulation was amended in August 1998 to make it more attractive to U.S. producers. In the six months ending March 1999, 51 000 feeder cattle were imported from the United States.

How will this affect the future of the Canadian cattle industry? According to industry experts, the agreement may benefit Canadian beef producers by allowing farmers to import feeder cattle at lower prices.

Disease-free Beef Gives Canada an Advantage

Since 1949, nearly 10 types of major animal diseases have been eliminated in Canada. Bovine tuberculosis has almost been completely wiped out. Vaccines and a mandatory testing and slaughter program have all but eradicated bovine brucellosis. A number of other common animal diseases have never been reported in Canada, a tribute to strict import controls and high domestic health standards.

Cowboys Ride the Range

These days, most cowboys in Western Canada are at country fairs and exhibitions. In early summer, when cattle walk to their pasture to graze and later, when they return to the farm in the fall, cowboys on large ranches with large herds can still be seen riding horses. Recently, though, they have been switching to all-terrain vehicles or motorcycles to round up the animals. Moving the many small herds on marginal land to and from pasture are unobtrusive events that go largely unnoticed.

Kim Bristow-Callahan, Statistics Canada

Data and Mapping Notes provides information regarding the 1996 Census data presented in the maps and references to mapping techniques used.

• Dairy Cows by Census Division, 1996 Map | Read about this map
• Small Farms by Census Division, 1996 Map | Read about this map
• Wheat Acreage by Census Division, 1996 Map | Read about this map

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