Canadian Beef Economics
Agriculture, specifically the Canadian beef sector, continues to show how it is a sustainable driver of Canada’s economy, contributing $21.8 billion to Canada’s GDP. Economic sustainability is dependent upon the health of the sector along the supply chain – between producers at the cow/calf level, the feedlots, and the processors. The people who operate Canada’s 60,000 beef farms, ranches, and feedlots understand that sustainable management is essential for the environment and the economy. The decisions made by producers in this regard include management decisions that protect the land resource and work with it in a beneficial way to sustain cattle production for the long-term.
The Canadian cattle industry represents the second largest single source of farm cash receipts, averaging $9.7 billion annually from 2019-21, representing 14% of total farm cash receipts.
As a whole, the Canadian cattle and beef sector contributes $22 billion to GDP at market prices (2019-21), generating approximately 347,000 jobs in Canada either directly or indirectly, with every job in the sector yieldinganother 3.9 jobs elsewhere in the economy.
For every $1 of income received by workers and farm owners, another $6.22 is created elsewhere (Kulshreshtha et al. May 2021).
In 2020, retail beef demand was the third highest in 30 years.
- The global meat demand is expected to surge by 70 per cent by 2050 due to a growing world population, particularly the middle class.
- Around 50% of Canadian beef production is exported.
The Beef Cattle Cycle
The beef cattle cycle, a biological-economic phenomenon typically lasting 10-12 years in duration, is an underlying driver of industry dynamics including contraction and expansion of the herd size, prices and profits. Several factors influence the cycle including the financial condition of producers, weather (feed availability), trade barriers and market access, the exchange rate and consumer demand domestically and internationally.
There are 4 distinct stages or phases in the typical beef cycle:
- Consolidation at the bottom is usually only one year in duration but in adverse economic circumstances may last up to two or three years.
- The Expansion phase normally lasts five years but can be up to two years shorter and up to three years longer.
- The Peak year is not easy to predict with accuracy, is influenced by outside factors such as domestic and international beef demand, and production costs.
- The Liquidation phase normally is two to three years in duration.
Learn more about CCA’s trade and market access advocacy priorities.
CCA works to address issues impacting economic competitiveness with research through the Beef Cattle Research Council and with government through CCA’s board and committees. Learn more of what CCA is doing to address economic competitiveness issues.
Despite challenges with production costs, Canada has a natural advantage of our landscape and ecosystem. Canadian beef farmers and ranchers can be economically sustainable while also providing environmental benefits and contributing to the fight against climate change.
Learn more about Canada’s cattle market information at Canfax.