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1. BEEF INDUSTRY IN CANADA INTRODUCTION Decision makers concerned with the livestock sector of the developing world face a formidable challenge. Fuelled by population growth, rapid urbanization and rising incomes, demand for meat is expected to increase. Most of the increased demand could be met through intensification i.e., increasing the productivity of land and livestock. Rising demand for high quality products and economies of scale also lead to specialization and industrial production modes where in, ensuring animal welfare is definitely challenging. TRENDS IN PRODUCTION Canada produced approximately 0.65 million tonnes of beef in 1961 and it increased to 1.3 million tonnes in 2007 (FAO PRODSTAT, 2007). This represents a 100 % increase over the past 46 years. In 1996, about 11.6 million beef cattle were recorded, which is slightly higher than the 10.3 million recorded in 1971. Beef cattle inventories have expanded since 1988, peaked in 1995, and decreased through to 1999. There were 5.61 million beef breeding cows and heifers in 2007. There has been a reduction in the number of cattle slaughtered from 4.6 million in 1970 to 3.8 million , probably because beef production per cow has increased from 170 kilograms in 1972 to approximately 272 kilograms in 2006 (Canada beef, 2009). Production is highly concentrated in the very large farms. In 2000, only 4% of beef cattle farms were very large farms, but they generated 57% of the value of production, while the small farms represented 53% of all beef cattle farms and generated less than 10% of the value of production (V. Mitura and L. Di Piétro, 2003). AAFC 2008 report says that, there were 13.18 million cattle and calves, down 5.1% from the previous year, on 86,520 farms and ranches. Myles (2008) reported that reflecting the ongoing cost-price squeeze and weak returns, Canadian red meat production is forecast to fall by an additional 3 % by the end of 2009. FARM SIZE AND TYPE Specialization has been an evolving characteristic of the industry since the early 1960's, resulting in two distinct types of production systems: the cow calf operation and the feedlot operation. According to the 2003 Farm Financial Survey (FFS), the majority of beef cattle farms were cow-calf operations in 2002 viz: 72%, 17% were feedlots, 4% a combination of the two and 7% were other types. Cow-calf operations are concentrated on smaller farms, representing 75 % and 79% of small and medium farms respectively. Feedlots are concentrated on very large farm, representing 46 % of these farms. Feedlots range in size from farms, with a few hundred head capacity to very modern operations, feeding over 40,000 animals at one time. Type of stockCow-calfCow- calf FeederFeedlot cattle Other cattleTotalNumber of farms 361552290 8505 3380 50335Size of farmsSmallMediumLargeVery large TotalNumber of farms 221451175514240219550335 Table 1 Types of farms and their sizes The different types of farms and their numbers as reported by Mitura and L. Di Piétro (2003) is given in the table above and further depicted in Fig 1. It is estimated that over 80% of the grain fed cattle in Canada are produced in feedlots, with capacities over 1,000 head (Canada Beef 2009). According to the Beef Industry Fast Facts 2007, average beef cow herd size in Canada is 61. Although concentrated in large outdoor feedlots, a good portion of the beef cattle are raised for most of their lives in traditional non-confined grazing systems (Fraser, 2005). Many feedlots have become larger and highly mechanized over the past fifteen years to specialize in cattle feeding. OWNERSHIP The number of beef cattle farms fell from 0.19 million in 1980 to 0.15 million (1990) and 0.12 million in 2000. Operators in beef cattle ranching and farming were reduced to 86,000 from 94,335 during the period from 2001 to 2006 (Statistics Canada). There are a lot of small cattle farms as well. About 61% of the farms have 19% of the beef cows and these farms have less than 47 cows. About 26% of the farms have 33% of the beef cows and each of these farms has between 47 and 122 cows whereas, 13% of the farms have 48% of the beef cows and each of these farms has over 122 cows (Beef Industry Facts, 2007). A cost-price squeeze has adversely impacted the profitability of livestock production and about one in twelve cattle producers have exited the business. AUTOMATION & ECONOMICS Automated feeding and watering systems are prevalent and other than this, there is little automation in the farms. The nature of Canada's cow/calf ranching operations has changed significantly over time with an emphasis on intensive and specialized use of resources in beef production. Beef production has become more streamlined and efficient as producers specialize in one part of the production cycle. Specialization, and the tendency to use marginal land to raise beef cattle, has made beef production very cost effective. Farm Financial Survey 2007 says that cattle operations experienced a 53% drop in net cash farm income in 2007 compared with a 16% drop in 2006. Farm Credit Canada released the 2008 North American Red Meat Market Assessment study which says that within the past 20 years, well-resourced integrated systems, contractual arrangements and dedicated supply chains have emerged. “By comparison, Canadian livestock systems appear less competitive other than as a low-cost commodity supplier”. .
The report concludes that industry downsizing is likely, after which industry will need to develop new organizational strategies and marketing skills, addressing fundamental cost challenges such as feed grain costs and labour costs per unit of output.” The suggested cost cutting measures include allowing cow-calf producers to finish beef, rather than putting cattle into feedlots; reducing hormone and antibiotic use; disconnecting a portion of cattle finishing from feed grain-price fluctuations; reducing purchased inputs, making cattle farms more financially secure and resilient; reducing petroleum use, maintaining grass cover, and expanding global food supplies by reducing grain and grain land use in beef production REFERENCES Agriculture and Agrifood Canada (AAFC). 2007. Available at http://www4.agr.gc.ca/AAFC-AAC/display-afficher.do? Id=1184009758250&lang=eng. Accessed on 2/10/2009. Canada’s Beef Industry Fast Facts, 2007. Available at http://albertabeef.org/producers/cattle-practices/ Accessed on 06/10/2009. Canada Beef. 2009. Our Industry. Available at http://www.cbef.com/Industry.htm#top Accessed on 2/10/2009. Farm Credit Canada. 2008. Available at http://www.fcc-fac.ca/newsletters/en/express/articles / 20081128_e.asp Accessed on 5/10/2009. Farm Financial Survey. 2003. Statistics Canada. Agriculture and Agri-food Canada Available at http://www4.agr.gc.ca/AAFC-AAC/display-afficher.do?id=1226675563796&lang=eng Accessed on 8/10/2009. Farm Financial Survey. 2007. Statistics Canada. Agriculture and Agri-food Canada Available at http://www4.agr.gc.ca/resources/prod/doc/pol/pub/ffs-03-eff/pdf/ffs-03-eff_e.pdf. Accessed on 8/10/2009. FAOSTAT 2007. Food and Agriculture Organization of the United Nations. Available at http://faostat.fao.org/site/569/DesktopDefault.aspx?PageID=569#ancor. Accessed on 3/10/2009. Fraser, D. Animal Welfare and the Intensification of Animal Production An alternative interpretation. 2005. FAO Readings in ethics. Knowledge and Communication Department Available at http://www.fao.org/docrep/009/a0158e/ a0158e00. htm. Accessed on 7/10/2009. Mitura V and Piétro L Di, 2004. Agriculture and Rural Working Paper Series -No. 69 Canada’s beef cattle sector and the impact of BSE on farm family income. Statistics Canada. Available at http://dsp-psd.tpsgc.gc.ca/Collection/Statcan/21-601-MIE/21-601. Accessed on 6/10/2009. Myles, G. 2008. Canada Livestock and Products Livestock Annual 2008. Available at http://www.fas.usda.gov/gainfiles/200809/146295792.pdf. Accessed on 6/10/2009. Statistics Canada. 2009. CANSIM, table 003-0032 and Catalogue no. 23-012-X Available at http://www40.statcan.gc.ca/l01/cst01/prim50a-eng.htm. Accessed on 02/10/2009. Statistics Canada. Farms, by farm type and province Census of Agriculture, 2001 and 2006. Available at http://www40.statcan.gc.ca/l01/cst01/agrc35a-eng.htm?sdi=beef%20farms. Accessed on 09/10/2009.