1 – Industry Overview Flashcards
1
Q
Important points
A
- Meat consumption
- Production and export
- Inventory
- Western Canada production
- Industry is segmented
- Contraction has led to high prices
- Packing industry is extremely consolidated
- Segmentation allows a variety of pathways
2
Q
Meat consumption
A
- Stable in Canada
- Beef and pork: 16-18kg/person
- Poultry continues to increase: 35kg/person
- *beef dropped slightly but went up again
3
Q
Why is poultry increasing?
A
- Cheaper
- “healthy”
- Environmental concerns
- *faster to cook
4
Q
Canada and beef production + export
A
- Small player for production (#10)
- *significant exporter (#8)
o We are very dependent on US market=top customer
o Also a decent about to Japan
o *grain finished, high-quality beef (#2 for ‘high quality’ beef) - *we can NOT eat all the beef we produce
5
Q
Beef suppliers to Canada
A
- US: 57%
- ‘cheaper’ beef from: NZ, Australia, Mexico, Brazil
6
Q
Canadian cow herd has been in a long-term phase of CONTRACTION
A
- “cattle cycle” traditionally 7-13 years
o Influenced by price, production and profit
o Biological lag from price signal due to reproduction constraints - *cycle pattern has been disrupted in last 15 years
7
Q
Canadian beef industry: inventory
A
- Dropping steadily
- *less than 12M now
- *period of contraction
- COW: 3.46M
- Farm: ~50,000
- *US also dropping
8
Q
Western Canada and beef production
A
- 45% AB
- 28% SK
- 11% MB
- *BC decreasing: 5.25
- *OPPOSITE OF DAIRY INDUSTRY
9
Q
AB and beef production
A
- Dominate fed cattle production
- 2/3 of cattle destined for slaughter
- # 4/5 region (SK #9/10)
10
Q
Beef industry is segmented
A
- Cow calf: predominately SMALL herds
- Intermediate stages of backgrounding and stocker operations
- Feedlot: predominated by LARGER commercial operations (primarily S. AB)
11
Q
What are the 3 phases of cattle producton?
A
- Cow-calf
- Backgrounder/stocker
- Feedlot
12
Q
Cow-calf
A
- Basic production unit
- Secondary or tertiary enterprise
- Utilizes land unsuited for other farming
- Small numbers of animals per herd
- *in W. Canada majority of calves born Jan15-June 30
- S. US: spread year round
13
Q
Canadian beef cow herd size
A
- Average: 69 cows (can’t make a living)
- 2/3 of farms have less than 47 cows
o 16% of total - 15% have more than 122 cows
o 2/3 of population total - *only ~500 that have over 500 cows=actually making a living off of it
- **total per farm: 115 average (SK and AB have the larger herd sizes)
14
Q
Cow-calf sales
A
- Sell calves at weaning
o Some wean and sell at a later date - Direct sale to feedlot
- Auction market system
- Satellite/internet sales
15
Q
Backgrounder
A
- Feed cattle for GROWTH prior to going to feedlot for finishing
- May occur on original cow-calf ranch or may involve a change in ownership
- Involves feeding calves for a shorter period for moderate weight gain
- Medium-low energy rations (forage based)
16
Q
Stocker
A
- Utilize forage and crop residues
- Grain stubble, wheat pasture, grass
- Often involve pasture on calves that have been backgrounded the previous winter
- Will be sold as YEARLINGS for a short period of finishing in the feedlot
17
Q
Backgrounder/stocker: what is need and location
A
- Limited infrastructure
o Confinement in pens, grazing pastures or a combo - Located where forage and grazing areas are in ABUNDANCE
- Utilized primarily by feedlot operators and/or cattle feeders to provide live cattle to the beef processor on a year round basis
18
Q
Feedlot
A
- Fed in pens where harvested feed is brought to them
- High energy diet
- Cattle may be 12-24 months of age
- Farmer-feeder/corporate feedlots
- Custom feeding vs. owning cattle
- *70% of cattle fed in lots >1000 head
19
Q
Feedlot numbers: days feed, target slaughter, animals per pen and site
A
- Calves: 180-280 days
- Yearlings: 100-180 days
- Target slaughter weight: 1250-1550lb live for steers
- Intensive production
- 100-350 animals per pen
- Up to 150,000 per site
- *high energy, low roughage diets to optimize growth
20
Q
Provincial fed cattle production: %
A
- 71% AB
- 18% ON
- 8% BC/SK/MB
- *AB and ON make top 10
- **Less than 200 feedlots in AB + SK (less than 1000 feedlots)
**PYRAMID THAT GETS NARROWED DOWN QUICKLY
21
Q
Why is feeding industry concentrated in Alberta?
A
- Access to grain
- Access to weaned calves
- Dry semi-arid climate=ideal for cattle production
- *established infrastructure with the meat packing industry CONCENTRATED in Alberta
22
Q
What has contraction of the industry led to?
A
- High prices for cow-calf industry
- *drought in 2021-2023 had major impact
- PRICE: $/cwt live weight (cwt: per 100lbs NOT kgs)
- Weaned calves have seen historic HIGHS due to high demand and LOW volume
- Margins in feedlot sector has been very VOLATILE
- *feedlot profitability is tied to grain prices, Canadian dollar and cattle prices
o Highly volatile with LOW margins
23
Q
Price right now: $/cwt, calves and cull cows
A
- Calf: $425/cwt
- *historic highs
- Cull cow: $180/cwt
24
Q
Packing industry is EXTREMELY consolidated
A
- Only 4 major plants in Canada
o Cargill: High river, Guelph
o JBS: Brooks
o Several small ones (Harmony Beef) - Slaughter cattle market is still competitive
o Only really 3 in Canada, but will take some from US as well - *carcass weights continue to increase which helps efficiency of production
25
Packing plants
- Very cool
- Disassembly plant
- Put in boxes=particular cuts
o Ex. tongues (Europe, Mexico, Japan)
o Ex. steaks (NA)
26
Food retailer market share
- Loblaws/Shoppers
- Sobeys/Safeway
- Metro
- Costco
- *Walmart=highest globally
27
Carcass weights
- Continues to increase!
28
Segmentation of beef industry allows cattle to move to slaughter through a variety of pathways
- Partly dependent on market conditions
- Backgrounding/stocking allow us to put cattle in a ‘temporary holding patter’ and slow down their growth
- *Livestock market is essential part of the industry
