Raising Cattle in Alberta

OLDS, Alberta (DTN) -- While Canada's wildfires have led to smoky conditions around parts of the Midwest and eastern U.S., the airstream flows have moved that smoke out of southern Alberta where skies are mostly clear.

As part of the International Federation of International Journalists (IFAJ) annual meeting, agricultural reporters from around the world are touring farms and livestock operations around Alberta this week.

That included a beef tour visiting a ranch and feedyard, as well as the offices for the Canadian Cattlemen's Association in Calgary.

While prices are good for cattle, the main feed used by Alberta feeders to fatten cattle -- barley -- is also at a record high right now of around $415CAN ($315) per metric ton. Some of that is driven by drought that continues to plague Alberta.

1. Alberta, the center for Canadian beef production, is facing some pressures.

Alberta has about 18,000 producers and roughly 4.6 million head of cattle, which is about the same volume of cattle as states such as Oklahoma. Alberta has just over 70% of Canada's total cattle-feeding and processing capacity

The drought, much like in the U.S. in recent years, has led to a cattle herd in Canada that's about 2.5% smaller than a year ago.

Alberta farmers and ranchers are facing more pressures on land values. Graeme Finn, a cattle producer who moved to Alberta from Australia in the early 1990s, said land values in the last 20 years have gone from under $1,000 an acre to an average of more than $4,200 an acre now. Investors, including investment funds and potential buyers from China, as well as area Hutterite colonies, are increasingly bidding for farm and ranch land.

"So it's kind of getting out of hand and the price being paid does not reflect the incomes off the land," Finn said.

While carbon markets have developed in the U.S., that's not the case so much in Canada, Finn said.

"Everybody's talking about it and everybody's talking about selling it, but nothing is happening in Canada," he said. "I don't know if I will get paid for carbon but a lot of people are banking on it."

2. Canadian beef is coming off a good year.

Just under half of all Canadian beef production is used domestically. Per capita consumption domestically was up about 2.9% in 2022.

Canadian-produced beef held nearly an 81% domestic market share, meaning imports amounted to about 19% of Canadian consumption.

Canada's exports last year were up 5% in value to $4.68 billion CAN ($3.54 billion US) -- the highest on record. Volume increased 1% to 511,000 metric tons -- the second-highest on record.

While Canada has strong markets in countries such as Japan ($378 million US), more than 70% of the country's beef exports went to the U.S., valued at about $2.5 billion.

By comparison, U.S. beef exports in 2022 topped $11.68 billion, up about 10% from 2021. U.S. beef exports to Canada were nearly $835 million, up 8% from 2021, or 105,220 metric tons in volume, according to the U.S. Meat Export Federation.

3. EU hormone certification, once a big market, has waned.

Finn markets his cattle for the EU market, which certifies the cattle were not raised with hormone implants. But Mick Taylor, research and cattle manager for Cattleland Feedyards near Strathmore, Alberta, said he has fewer EU-certified cattle in his feedyard than in past years. The feedyard at one time might have had 50% of its cattle headed for the EU market but right now he said about 90% of the cattle are headed for domestic markets.

"The price of our fat cattle is at an all-time high here in Canada so we can make a buck here now with implants that help to improve gain efficiency," Taylor said. "So right now we have a very small number of EU cattle."

Producers right now are getting $4.10CAN ($3.10 U.S.) a pound for carcass weights. That has been one factor that has reduced the number of producers willing to take the time and deal with the documentation to not use hormone implants.

4. Canadian cattle producers pay higher checkoff fees than U.S. counterparts

While U.S. producers pay $1 for their checkoff, producers in Alberta pay $4.50CAN ($3.40US) for each head sold. Under Canadian law, $2.50CAN ($1.89) of the checkoff is federal and nonrefundable.

Alberta adds another $2CAN ($1.51) per head of a checkoff for its 18,000 producers. That part of the checkoff is refundable, and producers will request refunds on about one-third of the amount collected. Schmid said typically the largest cattle feeders are the ones most likely to request refunds on the checkoff.

5. Traceability has been big in Canada for two decades.

In May 2003, Canada had its first case of bovine spongiform encephalopathy (BSE). That sparked a major drive in Canada for traceability measures. Radio-frequency identification devices (RFID) are mandatory in Canada. While the tags are mandatory, the government doesn't pay for producers to buy the tags.

The traceability requirements have been a driver for the country's exports, however.

"That really opened up the world for us to show that we have traceability and are able to track outbreaks," Finn said.

6. Canadians are watching the USDA "Product of USA" rule.

Public comments closed in mid-June for USDA's proposal to rewrite the voluntary "Product of USA" label. The rule would tighten the "Product of USA" or "Made in the USA" label claim to be used on meat, poultry and egg products only when they are derived from animals born, raised, slaughtered and processed in the United States.

Ryder Lee, general manager of the Canadian Cattlemen's Association (CCA), said the organization worked with the Canadian federal government as well as the National Cattlemen's Beef Association (NCBA) and the North American Meat Institute (NAMI) on public comments about the rule. Now that the public comment period is closed, Lee said CCA will be watching how USDA moves ahead on a potential final rule.

"We don't think it adds value, it takes value from the marketplace," Lee said, adding that there are better ways to promote beef to consumers. "The other concern here is at some point it will discount Canadian live cattle exports."

Watch a tour of Cattleland Feedyards near Strathmore, Alberta, here: https://www.dtnpf.com/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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