Special Features - Livestock 2016

CentralAlbertaLife

2016

LIVESTOCK SHOWCASE Featuring local producers of Central Alberta

2 Livestock Showcase. Central Alberta LIFE Thursday, Feb. 11, 2016

2016 Cattle Outlook ByDianne Finstad.

W

ith the 2016 calf crop beginning to hit the ground, central Alberta cattle producers look ahead and wonder what the year will hold for market prices.

As Manager and Senior Analyst at Canfax, Brian Perillat specializes in watching the numbers and analyzing the trends. He shared some insights at the recent Feeder Associations of Alberta convention in Red Deer.

In an industry ruled by supply and demand, low supplies of both cattle and beef has dominated the business for the last several years. Encouraged by those higher prices, a herd rebuilding trend is underway, at least in the United States.

“The latest USDA report showed cow numbers up four per cent this year, to just over 30 million head. They’ve got big expansion.

Their replacement heifers are the biggest number they’ve had since 1995,” Perillat told the Feeder Association delegates.

The expansion put downward pressure on the American cattle market all last year.

Fortunately, Canadian prices weren’t impacted as much.

“The low Canadian dollar protected us from the U.S. downturn,” explained Perillat.

Tight supplies and good demand have kept Canadian prices historically strong, especially for cow-calf producers.

“Any of those still standing deserve all they can get,” Perillat noted, wryly.

After two profitable years, the signals are there to encourage growth in the Canadian cattle herd too. But Perillat says so far there are mixed messages on expansion in Canada.

The culling rate has dropped, which means there will be more cows around to start 2016.

But while the liquidation of the herd appears to be done, industry watchers aren’t terming Canada in growth mode yet.

“There seems to be a limited appetite for expansion. Canada is showing next to no additional heifer retention. In fact, Alberta heifer numbers were still down 2.7 percent.”

Livestock Showcase. Central Alberta LIFE Thursday, Feb. 11, 2016 3

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That will keep a lid on big calf numbers coming to market in Canada yet.

The story of 2015 was the drop in the Canadian dollar, generally considered good news for the export oriented beef industry. But surprisingly, the low loonie has not attracted American buyers to gobble up Canadian feeder cattle. Perillat says that’s because Canadian prices, even when adjusted for the dollar, have been strong enough it hasn’t paid the freight bill to ship them south.

“The packers have been very aggressive in keeping cattle in Canada. Our numbers have shrunk, so they’ll pay the price to keep them local. The low dollar does help them on their labor and operating costs, so they can compete with the U.S. plants,” said Perilliat.

While tight supplies are key to keeping prices strong, there is also danger in not having enough cattle to keep feedlots or packers operating. Canfax figures show Canadian plants only operating at about 75 per cent of capacity. So they’re hoping to see adequate supplies, especially as Harmony Beef in Balzac is likely to become another player on the scene in 2016.

The other big factor in cattle economics is demand. While retail prices have been slow to react to the downward trend, there have been more beef features at the retail counter, and that moves a lot of product. But the global economy and its overall impact on beef demand remains to be seen.

While the great highs of the last several years may be behind us, Perillat expects a typical spring rally in the fat market. There’s no guarantee prices for animals going to the feedlot will follow suit, with better supplies factoring in. Calf prices will be closely tied to the loonie swings.

“You’ve got to watch the dollar,” cautioned Perillat. “It’s anybody’s guess, but we’re not seeing big shifts, upwards or downwards. It was the big driver in 2015, and it’s going to continue to be a factor.”

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4 Livestock Showcase. Central Alberta LIFE Thursday, Feb. 11, 2016

Canadian Beef Industry Conference Debut ByDianne Finstad.

I

f you’re making holiday plans, and want to combine a little business with pleasure, there’s an event coming to Calgary this summer to consider. It’s national in scope, and all things beef in focus.

The Canadian Beef Industry Conference is brand new, combining elements of several other individual events. It’s also designed as a communication vehicle, to bring the various components of the business together for better awareness and understanding.

The conference takes place August 9-11 at the Grey Eagle Resort and Casino in Calgary.

Working together on the program are four partners; the Beef Cattle Research Council, the Canadian Cattlemen’s Association, the Canadian Beef Breeds Council and Canada Beef. Rob Smith, who heads up the Canadian Angus Association, is co-chair of the event, and sees the need for this kind of holistic approach.

“I think we’re at this very interesting time where there is a desire and a concerted

Livestock Showcase. Central Alberta LIFE Thursday, Feb. 11, 2016 5

effort to create a greater degree of unity and collaboration in the Canadian cattle and beef industry than there ever has been in the past,” noted Smith.

Movement in that direction began with the development of a National Beef Strategy, launched about a year ago. With the leaders of the various organizations talking more with each another, they decided it would be good to offer that same opportunity to their membership.

Traditionally, the cattle business is known for the rugged, determined individuals drawn to the various parts of the high-stakes game.

But that same independent approach has also been criticized for holding back progress for the industry as a whole. That’s especially true in today’s communication reality, where a social media outbreak can make an impression on market prices.

“If we can get people together and talking, there can be more understanding of the issues and production components that affect the various links in the beef chain,” explained Smith. “Then we can recognize where the value is, seeing how it goes right back down to the seedstock producer choosing genetics that can have an influence on the end product that is sitting on a consumer’s plate.”

While program details are still being finalized, Smith says they are lining up speakers to address the four main components of the Beef Strategy: connectivity, productivity, beef demand and competitiveness. But there will be other sessions to really sink your teeth into, ranging from workshops on production innovations to a golf tournament. The popular

Cattlemen’s Young Leaders program will have a new home there, celebrating the selection and graduation of participants.

“We’ll be looking at all the links along the value chain, from seedstock production, to cowcalf, through the feedlot and right on to harvest and marketing. We’re excited about what that program looks like.”

“Our absolute focus is bringing in primary producers and folks that work along that value chain, with a special target on families and on young producers. Our evening events are family friendly.”

Organizers don’t have to look far for inspiration. The National Cattlemen’s Beef Association in the U.S. has a hugely successful annual event. In fact, the Cattle Industry Convention is considered the oldest and largest in the cattle business, celebrating 118 years this past January in San Diego. It’s become a ‘can’t miss’ on the cattle calendar, and liner loads of Canadians take in the program and trade show every year, including Smith himself.

Since the November announcement, Smith and his co-chair from Manitoba, Virgil Lowe, have been encouraged about the buzz this made-in-Canada cattle convention is already generating. Registrations open March 1st and the program will be finalized by then. To keep in the loop on details, check the website beefstrategy.com “We are excited to bring Canada’s beef industry together under one roof,” added Lowe, a beef producer and an Associate with Dentons Canada LLP. “No matter where you live or what your role is in our industry, this one-of-akind national event will be worth the trip.”

6 Livestock Showcase. Central Alberta LIFE Thursday, Feb. 11, 2016

2016

BAR-H CHALLENGER 82W Sire: NJW 45P 139J Full Tank 134S Dam: KR1 Renegade 27N Tattoo: AHPC 82W Birthdate: April 14, 2009 Birthweight: 88 lbs Registration number: C02929648

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8 Livestock Showcase. Central Alberta LIFE Thursday, Feb. 11, 2016

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Sale Offering 50 Coming 2 Year Old Black Angus Bulls

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12 Livestock Showcase. Central Alberta LIFE Thursday, Feb. 11, 2016

“I think about what I can do in my own corner of the world to make positive change. I believe that we’re stewards of the land, and I want my farm to work with nature as much as possible.”

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