Fewer cattle improve prices for producers

Alberta’s beef has made a name for itself around the world.  However the number of cattle in the province has dropped significantly in recent years.

“We’re now down 24 percent in total beef cow numbers in Alberta since 2005 and so the liquidation over the last eight years has been significant,” said Brenna Grant from Canfax, a division of the Canadian Cattlemen’s Association.

Alberta Agriculture reports cow numbers peaked near 2.2 million in 2005 before dropping to just below 1.6 million in 2011.

Bob Balog, from Balog Auction Services in Lethbridge said, “We had prices right back before BSE getting very, very strong and all of a sudden we had that dilemma. Through the course of time a lot of things happened. The first thing is of course a lot of people in the industry got older and a lot of the young people decided to leave the industry.”

However producers now are pleased with what they’re getting for their cattle. With fewer animals on the market, cattle prices have
risen.

“Prices are fantastic,” said Balog. “These are the best prices we’ve had probably in a lot of classes of cattle since I’ve been in the business. A lot of the cattle are bringing more money than I’ve ever sold them for.”

Grant says the industry is in the consolidation phase. She expects cow numbers will bo up or down a percent or two but basically steady for the next two to three years before going into an expansion phase.

“That expansion phase, we’re expecting to actually be really cautious,” Grant said, “because producers are going to be looking to rebuild equity that has been lost over the last decade before they actually increase numbers.”

Balog said, “I think that we’re going to see a difference in the people who do come back in. Definitely we will get some new people now that perhaps grain isn’t worth as much as it has been the past couple of years and there will be some people that will come back from that segment of the agriculture industry into the livestock. The other thing I think we’re going to see is the outfits that are here are going to get bigger.”

Feedlots that finish cattle are being affected by the lower number of cattle. Grant said there are fewer feedlots than there were a couple of years ago because of tight supplies.