BARRHEAD – An agricultural consulting company sees reasons to be bullish on strong cattle prices and rising consumption, but warns a new U.S. administration could spell some market uncertainty for producers.
Brian Perillat, agribusiness specialist with More than Just Feed, recently shared market data with the Alberta Feeders Association.
“Prices are beyond expectations; they've been extremely strong here,” Perillat said.
However, he said, “when I read marker reports daily around the U.S. market, there is speculation with a new president coming to the U.S.”
The United States Department of Agriculture (USDA) reported cattle and calves inventory was down two per cent from 2023 as of Jan. 1, 2024, totalling 28.2 million beef cattle.
The USDA website shows a continued decrease in inventory since 2019 with the 2024, although the numbers show a smaller inventory drop than occurred in 2014-15 in the U.S., when there was a large drop in production. Cattle numbers are now the lowest in the U.S. since 1960 and Perillat said they will continue to decline.
“Come Jan.1, 2025, we're projecting a continued drop in production in the U.S. despite the strong prices,” he said.
Likewise, Canada is seeing its lowest cattle numbers since the late 1980s, Perillat said.
The USDA reported that in October 2024, Canada exported 64,011 cattle for immediate slaughter to the U.S. That translates to between 600,000 to 1.2 million head of cattle exported to the U.S. each year for slaughter. Canada also exported 19,521 cattle and calves for feeding and 1,308 cattle for breeding, for total U.S. exports of 84,840.
In comparison, Mexico exported 116,442 cattle to the U.S. in October 2024. During the same timeframe, the U.S. exported 31,475 cattle to Canada.
Perillat said Alberta has been exporting 50 per cent of its beef and cattle production, and 70 per cent of Canadian exports go to the U.S. Alberta provides 40 per cent of that inventory, according to the Government of Canada website. The site also reported 11.9 million in cattle and calf inventory for July 2024.
Canada also imports up to 300,000 feeder cattle annually, Perillat said.
One thing that could affect the market is the new U.S. administration under President Donald Trump, who has threatened an across-the-board 25 per cent tariff on Canadian goods. Canadian cattle already trade at a pretty large discount with the U.S., and there could be further discounts if tariffs are enacted, Perillat said.
Currently, rising demand for beef is working in the industry's favour. The average beef consumption per person in the U.S. was 54.3 pounds in 2024. The forecasts by Statista.com project those consumption numbers to increase to 56.9 by 2033.
Meanwhile, Canada’s beef consumption per person in 2021 was 26.1 kilograms (57.5 pounds).
However, affordability may affect consumer choices. Perillat noted meats like pork are much less expensive than beef.
Other trends Perillat observed included increased processing capacity in Canada, and changing balances of feeder cattle and corn imports.
Canada was the eighth largest beef exporter in the world in 2023 according to Statista.com.
