Canada cattle herd decline slowing, but high grain prices loom

Tue Aug 21, 2012 7:13pm EDT
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WINNIPEG, Manitoba (Reuters) - The long decline of Canada's cattle and calf herd slowed to its lowest year-over-year reduction in seven years, Statistics Canada data showed on Tuesday, but surging grain prices may renew the pressure that has hurt the profitability of ranchers.

Farmers had 13.5 million cattle and calves on their farms as of July 1, the fewest since 1994, and down 0.1 percent from a year earlier. That rate of decline is the smallest since 2005, when the country's herd last grew.

Cattle inventories were temporarily bloated after ranchers' selling options dwindled as a result of the discovery of mad cow disease on a Canadian farm in 2003. High grain prices - peaking in 2008 - made feeding cattle more costly, and many ranchers responded by selling off their herds - until recently, when stronger cattle prices offered some relief.

But corn and wheat prices have soared again this year after devastating droughts shriveled corn crops in the U.S. Midwest and wheat production in the Black Sea region.

"If feed prices start climbing up again, there will be pressure on the producers," said Bishnu Saha, unit head of livestock estimations for Statistics Canada, the country's national statistical agency.

Canadian hog inventories rose 1.5 percent year over year by July 1 to 12.9 million hogs, the second straight increase after five years of declines.

(Reporting by Rod Nickel in Winnipeg, Manitoba; editing by Gunna Dickson)

Cattle graze in a mist-covered field at dawn on a farm outside Chilliwack, east of Vancouver, British Columbia September 10, 2011. REUTERS/Andy Clark