The U.S. ag attache in Canada says after several years of declining, cattle and hog numbers appear to have reached their lowest point and modest expansion should begin in 2012 -- although due to the relatively strong Canadian dollar, the outlook remains weak for beef and pork exports in the year ahead.
"Due to relatively good supplies of barley, wheat and canola, Canada continues to maintain a feed cost advantage, resulting in lower exports of livestock to the U.S.," says the attache.
The attache estimates beef herd expansion of around 1% in total cattle inventories in 2012 based on increased numbers of beef heifers retained for replacement and a substantial drop in cow slaughter. "Although beef production will go up in 2012, supplies remain tight and the market will rely on imports to fill the gap," adds the attache, noting in 2011, Canada imported 13% more beef than in 2010, while exports declined by an estimated 21%.
The attache says hog herd liquidation has ceased and farmers are looking to consolidate their operations. The attache expects 2012 exports of live hogs to be similar to the current year and slaughter will be up just slightly in 2012 after a small decline in 2011. "Given fairly similar weights, pork production will show a modest increase in 2012, after some reduction in 2011," it adds.
The attache says because of relatively weak pork demand, it exports pork imports in 2012 to be similar to the current year, which are expected to be 6.5% higher than 2010. Regarding pork exports, the attache expects no growth for the third straight year. "In 2011, gains in some export Asian markets, including Korea and Russia have been counterbalanced by reduced volumes in some other Asian markets, United States and Australia," it adds.