Beef Industry In Canada

STUDENT NUMBER- 10776094

BEEF INDUSTRY IN CANADA

INTRODUCTION

Decision makers concerned with the livestock sector of the developing world face a

formidable challenge. Fuelled by population growth, rapid urbanization and rising incomes, demand

for meat is expected to increase. Most of the increased demand could be met through intensification

i.e., increasing the productivity of land and livestock. Rising demand for high quality products and

economies of scale also lead to specialization and industrial production modes where in, ensuring

animal welfare is definitely challenging.

TRENDS IN PRODUCTION

Canada produced approximately 0.65 million tonnes of beef in 1961 and it increased to 1.3 million

tonnes in 2007 (FAO PRODSTAT, 2007). This represents a 100 % increase over the past 46 years.

In 1996, about 11.6 million beef cattle were recorded, which is slightly higher than the 10.3 million

recorded in 1971. Beef cattle inventories have expanded since 1988, peaked in 1995, and decreased

through to 1999. There were 5.61 million beef breeding cows and heifers in 2007. There has been a

reduction in the number of cattle slaughtered from 4.6 million in 1970 to 3.8 million , probably

because beef production per cow has increased from 170 kilograms in 1972 to approximately 272

kilograms in 2006 (Canada beef, 2009). Production is highly concentrated in the very large farms. In

2000, only 4% of beef cattle farms were very large farms, but they generated 57% of the value of

production, while the small farms represented 53% of all beef cattle farms and generated less than

10% of the value of production (V. Mitura and L. Di Piétro, 2003). AAFC 2008 report says that, there

were 13.18 million cattle and calves, down 5.1% from the previous year, on 86,520 farms and ranches. Myles

(2008) reported that reflecting the ongoing cost-price squeeze and weak returns, Canadian red meat

production is forecast to fall by an additional 3 % by the end of 2009.

FARM SIZE AND TYPE

Specialization has been an evolving characteristic of the industry since the early 1960's,

resulting in two distinct types of production systems: the cow calf operation and the feedlot


operation. According to the 2003 Farm Financial Survey (FFS), the majority of beef cattle farms

were cow-calf operations in 2002 viz: 72%, 17% were feedlots, 4% a combination of the two and 7%

were other types. Cow-calf operations are concentrated on smaller farms, representing 75 % and 79%

of small and medium farms respectively. Feedlots are concentrated on very large farm, representing

46 % of these farms. Feedlots range in size from farms, with a few hundred head capacity to very

modern operations, feeding over 40,000 animals at one time.

Type of stock Cow-calf Cow- calf Feeder Feedlot cattle Other cattle Total

Number of farms 36155 2290 8505 3380 50335

Size of farms Small Medium Large Very large Total

Number of farms 22145 11755 14240 2195 50335

Table 1 Types of farms and their sizes

The different types of farms and their numbers as reported by Mitura and L. Di Piétro (2003)

is given in the table above and further depicted in Fig 1. It is estimated that over 80% of the grain

fed cattle in Canada are produced in feedlots, with capacities over 1,000 head (Canada Beef 2009).

According to the Beef Industry Fast Facts 2007, average beef cow herd size in Canada is 61.

Although concentrated in large outdoor feedlots, a good portion of the beef cattle are raised for most

of their lives in traditional non-confined grazing systems (Fraser, 2005). Many feedlots have become

larger and highly mechanized over the past fifteen years to specialize in cattle feeding.


OWNERSHIP

The number of beef cattle farms fell from 0.19 million in 1980 to 0.15 million (1990) and

0.12 million in 2000. Operators in beef cattle ranching and farming were reduced to 86,000 from

94,335 during the period from 2001 to 2006 (Statistics Canada). There are a lot of small cattle farms

as well. About 61% of the farms have 19% of the beef cows and these farms have less than 47 cows.

About 26% of the farms have 33% of the beef cows and each of these farms has between 47 and 122

cows whereas, 13% of the farms have 48% of the beef cows and each of these farms has over 122

cows (Beef Industry Facts, 2007). A cost-price squeeze has adversely impacted the profitability of

livestock production and about one in twelve cattle producers have exited the business.

AUTOMATION & ECONOMICS

Automated feeding and watering systems are prevalent and other than this, there is little

automation in the farms. The nature of Canada's cow/calf ranching operations has changed

significantly over time with an emphasis on intensive and specialized use of resources in beef

production. Beef production has become more streamlined and efficient as producers specialize in

one part of the production cycle. Specialization, and the tendency to use marginal land to raise beef

cattle, has made beef production very cost effective. Farm Financial Survey 2007 says that cattle

operations experienced a 53% drop in net cash farm income in 2007 compared with a 16% drop in

2006. Farm Credit Canada released the 2008 North American Red Meat Market Assessment study

which says that within the past 20 years, well-resourced integrated systems, contractual arrangements

and dedicated supply chains have emerged. “By comparison, Canadian livestock systems appear less

competitive other than as a low-cost commodity supplier”. ."The report concludes that industry

downsizing is likely, after which industry will need to develop new organizational strategies and

marketing skills, addressing fundamental cost challenges such as feed grain costs and labour costs

per unit of output.”

The suggested cost cutting measures include allowing cow-calf producers to finish beef,

rather than putting cattle into feedlots; reducing hormone and antibiotic use; disconnecting a portion


of cattle finishing from feed grain-price fluctuations; reducing purchased inputs, making cattle farms

more financially secure and resilient; reducing petroleum use, maintaining grass cover, and

expanding global food supplies by reducing grain and grain land use in beef production

REFERENCES

Agriculture and Agrifood Canada (AAFC). 2007. Available at

http://www4.agr.gc.ca/AAFC-AAC/display-afficher.do? Id=1184009758250&lang=eng. Accessed

on 2/10/2009.

Canada’s Beef Industry Fast Facts, 2007. Available at http://albertabeef.org/producers/cattle-

practices/ Accessed on 06/10/2009.

Canada Beef. 2009. Our Industry. Available at http://www.cbef.com/Industry.htm#top Accessed on

2/10/2009.

Farm Credit Canada. 2008. Available at http://www.fcc-fac.ca/newsletters/en/express/articles /

20081128_e.asp Accessed on 5/10/2009.

Farm Financial Survey. 2003. Statistics Canada. Agriculture and Agri-food Canada Available at

http://www4.agr.gc.ca/AAFC-AAC/display-afficher.do?id=1226675563796&lang=eng Accessed on

8/10/2009.

Farm Financial Survey. 2007. Statistics Canada. Agriculture and Agri-food Canada Available at

http://www4.agr.gc.ca/resources/prod/doc/pol/pub/ffs-03-eff/pdf/ffs-03-eff_e.pdf. Accessed on

8/10/2009.

FAOSTAT 2007. Food and Agriculture Organization of the United Nations. Available at

http://faostat.fao.org/site/569/DesktopDefault.aspx?PageID=569#ancor. Accessed on 3/10/2009.

Fraser, D. Animal Welfare and the Intensification of Animal Production An alternative

interpretation. 2005. FAO Readings in ethics. Knowledge and Communication Department

Available at http://www.fao.org/docrep/009/a0158e/ a0158e00. htm. Accessed on 7/10/2009.

Mitura V and Piétro L Di, 2004. Agriculture and Rural Working Paper Series -No. 69 Canada’s beef

cattle sector and the impact of BSE on farm family income. Statistics Canada. Available at http://dsp-

psd.tpsgc.gc.ca/Collection/Statcan/21-601-MIE/21-601. Accessed on 6/10/2009.

Myles, G. 2008. Canada Livestock and Products Livestock Annual 2008. Available at

http://www.fas.usda.gov/gainfiles/200809/146295792.pdf. Accessed on 6/10/2009.

Statistics Canada. 2009. CANSIM, table 003-0032 and Catalogue no. 23-012-X Available at

http://www40.statcan.gc.ca/l01/cst01/prim50a-eng.htm. Accessed on 02/10/2009.

Statistics Canada. Farms, by farm type and province Census of Agriculture, 2001 and 2006.

Available at http://www40.statcan.gc.ca/l01/cst01/agrc35a-eng.htm?sdi=beef%20farms. Accessed

on 09/10/2009.


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Beef Industry In Canada