Total cattle and calves in the U.S. were reported at 97.8 million head on July 1, a decline of 2.2 percent. Canadian cattle and calves were at 13.52 million head on July 1, a slight decline of only .07 percent. In the last few years I have had the opportunity to speak at several Canadian cattle producer meetings. Much the same as in the U.S., Canadian feeder calf and cow prices have increased to record high levels. But Canadian producers were also asking if and when beef cow herd expansion would take place in the U.S. and/or Canada. Several Canadian cattle producers expressed an interest in expanding their beef herds, but were apprehensive given higher costs of production and the volatility in cattle and feed prices. 

On July 1, beef cow numbers in the U.S. were at 30.5 million head, down 900,000 from 2011. Beef cow numbers in Canada at 3.96 million were up 3,700 from last year. Severe drought in the U.S. Southern Plains last year and spreading to 80 percent of the cattle producing area this year took a toll on beef cow numbers. On the other hand, more favorable moisture conditions in much of the cattle producing region in Canada (over 80 percent of Canada's beef cows reside in Alberta, Saskatchewan and Manitoba) led to the modest increase in beef cows there.

Beef heifers retained for replacement in the U.S. at 4.2 million head were unchanged from last year's historically low number. Beef heifers in Canada at 662,200 were up 3½ percent over last year, and the highest number since 2007. Again, moisture conditions were likely a major contributing factor in the difference between the two countries. So, it looks like beef cow herd rebuilding in the U.S. will be delayed at least another year, while Canada's beef cow herd could continue to increase.

Feeder cattle imports from Canada were up from last year's low levels in the first half of 2012, but recently have declined to even below last year's low count. In 2011 Canadian feeder cattle imports were small due to:

1) Canada's relatively large cow herd decline during the last five years (minus-21 percent in Canada compared to minus-5 percent in U.S.);

2) cheaper feed (many Canadian feedlots feed barley instead of corn) and more favorable feeding returns than in the U.S.; and

3) the impacts of the Canadian dollar's higher value on feeder cattle prices. In the 2011 fall calf marketing season about 2.5 times more calves were exported to Canada than the previous five-year average.

That scenario may be setting up for 2012 as well, with poor pasture conditions and drought reduced supplies of corn in the U.S. and good growing conditions and a good barley crop in Canada. Feed barley was quoted at about $5.65 per bushel in Calgary, Alberta last week compared to corn at $8.22 per bu. in Omaha. Barley has about 85 percent of the value of corn for cattle feed.

-- From the In the Cattle Markets newsletter from Livestock Marketing Information Center.