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THE CITIZEN, WEDNESDAY, DECEMBER 4, 2002. PAGE 17.
Market analyst speaks of beef trends at symposium
By Janice Becker
Citizen staff
-The past year, beef producers have
witnessed a devastating drought in
the prairies, high feed costs as
availability slid and record meat
supplies in North America.
Anne Dunford, a market analyst
with Canfax, reviewed 2002 data
when she spoke at -a cow/calf
symposium in Brussels fast
Thursday.
Using graphs and charts, she
detailed how the industry had
responded. to changing
environmental and market,
conditions.
The cow/calf sector was greatly
affected in the west, she said, as the
worst of the drought hit the area with
the highest density of cow/calf
operations.
Though beef production was up in
the first half of the year, largely due
to increased carcass weights,
Dunford said the tonnage numbers
dropped as the year progressed
because of the drought. Many
animals were being sold into the
United States,
The culling rate • stood at 13 per
cent for 2002, said Dunford, but this
did not differ greatly from the 11 per
cent average in drought years.
"We see cow/calf numbers go up
when moisture is up and heifers on
feedlots have been up. for six years."
The total beef cow numbers for
the country were slightly less than
in 2001 (after a revision upward),
but still higher than in 1999, she
said. In Ontario, the numbers
continue to drop, down to 375,000
head from a 1995 high of about
460,000 head.
American herds numbers had been
falling since 1995, but have now
held steady at approximately 34
million head.
By Keith Roulston
Publisher
Many of the problems cattle
producers have with animals
infected with mycoplasma come
from animals infected before they
are born.
Rob Tremblay, a veterinarian with
the drug company Boehringer-
Ingelheim (Canada) Ltd. told the
Beef Symposium 2002 in Brussels
Thursday that there's nothing a
feedlot operator can do with these
animals except to protect other
animals from the mycoplasma they
shed. The sick animals are infected
by their mothers in the womb before
their immune systems develop he
said, creating what is termed
persistently infected (PI) calves
which no medication can cure. The
In spite of the lower head count,
production of beef continues to rise
as there has been an average of eight
pounds added to the carcass weight
per year since 1975, said Dunford.
She does not expect to see lower
individual carcass weights for 2002
because she believes the cattle were
fed Longer to keep weights to the
grid.
With the heavy sell off of animals,
Dunford said the prices for feeder
cattle dropped.
"It was a record year for Canadian
feeder cattle exports with 92 per cent
of the western sales going to the
States. That accounts for 400,000 to
420,000 head. In the last week of
October alone, 20,000 went south. In
the past, we have seer: imports. This
year there was just 10,000 compared
to 200,000 the year before," she
said.
There was also an increased
movement of cow/calves from
Alberta to Ontario.
Alberta and Saskatchewan have
realized a 25 per ce'it drop in the
number of cattle on feedlots.
Dunford said that only recently
has the price broken back into profit
areas. It had been sitting below the
break-even point since last spring.
On the outlook for the industry,
Dunford said there are several
factors which will impact
profi tab i I i ty.
"The loss of equity has affected
the buyer's ability to purchase
animals," she said.
The drought may cause producers
to place animals on the market
earlier and at-lighter weights. Spring
had always been the preferred time
to market if the weight is up.
Summer cattle tend to lose money,
as a 1979 to 2001. trend analysis
showed.
The drought has also caused
uncertainty for the availability of
animals will 4ep sliding no matter
what, and though one cow managed
to live 12 years, providing infected
offspring to infect other herds, the
majority of cattle die by 18 months.
But a vaccination for BVD of all
cattle arriving at a feedlot may
actually help because it may cause
some of the PI calves to die earlier,
meaning at least they didn't add to
their feed costs, Tremblay said.
Mycoplasma is also often a factor
in deaths of cattle in feedlots that are
diagnosed with other diseases,
Tremblay said. It seems - like
mycoplasma plays a role in the
deaths of cattle from chronic
pneumonia, polyarthritis syndrome
(CPPS) with 44 per cent of deaths
from CPPS in one test group being
found to have been infected by
mycoplasma. It seems mycoplasma
feed crops and costs could be higher.
Dunford has a "bullish" outlook
for feed prices in 2003.
"At some point, there will be
heifer retention and that will mean
further need for feed supplies," she
said.
There were problems in the beef
industry prior to the most recent
drought with consumer demand
falling through the 1980s and 1990s,
with the lowest between 1996 and
1998, she said, noting that there is a
great difference between
consumption and demand.
"There was a nine per cent
increase in demand last year," she
said, but that was because the price
per pound went up. Consumers have
been paying more since 2000.
"The feed steer and packer price
trends are similar, but retailers run
their own trend and in 2002 there
was a huge difference (in the price),"
said Dunford.
' "The goal of the meat manager is
to move meat. He doesn't care what
(meat) or how much of each."
Realizing that beef consumption
in Canada has stayed somewhat the
same for 15 years, producers had to
start looking at where the product
was going.
"In 1990, 88 per cent of Canadian
beef was sold to Canadians and 12
per cent to Americans. Last year, just
53 per cent stayed at home and 35
per cent went to the U.S. Mexico has
become our number two customer,
in just three years. Our customer
base has changed."
Dunford said the industry is now
marketing the product with the
export markets in mind.
The growing U.S market is
significant because, while Canadian
eat an average of 47 pounds of beef
per year, the Americans consume 68
pounds.
While Canada only accounts for
birth
plays a role but nobody knows for
sure, Tremblay said.
There is unlikely to be a
vaccination developed for
mycoplasma, he said. For one thing,
mycoplasma knows how to avoid the
calf's immune system. It has
probably been around a long time
and has discovered how to adapt.
Researchers • feel they'd need a
vaccine that dealt with at least three
strains of mycoplasma to be
effective and one of those strains
would need to be changed every two
or three years or the vaccine would
be worthless.
"I don't think vaccination is
going to solve the mycoplasma
problem," Tremblay said. "We don't
even know what bug we're dealing
with. The Ontario virus is different
Continued on page 18
three per cent of the producers on the
world trade scene, the country is the
third largest exporter with 15 per
cent of the trade.
The country of origin labeling,
which becomes mandatory in 2004,
will continue to be a factor as
producers of pork, fish, beef and
produce deal with the regulations.
Dunford believes some foreign
retailers may say no to Canadian
product to avoid the hassles of
imports as it is an "administrative
nightmare".
.For the future, Dunford foresees a
small calf crop this year and next,
allowing prices to recover if crops
support that move.
Feed.cost will help determine the
calf prices and the U.S. could still
play a major role, boosting exports if.
Canadian prices fall to the American
floor price.
The industry will have to continue
to deal with world economics and
health issues such as food safety and
country of origin labeling.
There will also have to be an
increased focus on the customer
demands.
"Meeting consumer preferences is
critical," she said. "Consumers want
information and a 1-800 number
provided and retailers want case-
ready product."
With the top four retailers
controlling 65 per cent of beef sales
in the country and the top eight
holding 85 per cent, meeting the
retailers needs is vital to selling the
product. -
Providing a satisfactory product to
the processors is also dnportant as
four plants handle 78 per cent of the
meat and two of those, which are in
Alberta, procesS 60 per cent of the
Canadian total.
This consumer-focused trend will
also force producers to sell cattle on
formula, contract or grid instead of a
negotiated average price, said
Dunford.
Producers will have to continue to
change as market trends dictate.
Calf infections begin before