Beef producers can expect a strong year in 2018, according to a new report.
Farm Credit Canada (FCC) has released its economic outlook for the country's agriculture sectors, and Canada's beef industry is among those areas expected to see the greatest returns in 2018. Craig Klemmer, principle agriculture economist for FCC, said the beef industry has many good things going for it right now.
"Prices remain historically strong, and a lot of that strength we are seeing in the overall beef market has been due to strong demand, both domestically and internationally," he said. "Demand for protein is improving."
The FCC has projected weight gains will drive growth this year. Beef production grew 2.2 per cent in 2017, but is expected to slow to 0.2 per cent in 2018. The number of replacement heifers is expected to increase this year, but no growth in herd size is expected until 2019. Canadian slaughter rates are also expected to fall in response to heifer retention and increased exports of live cattle to the U.S. for both feeding and slaughter.
The FCC report outlined three more trends beef producers should watch for in 2018: domestic retail competition, disrupted and emerging trade flows, and interest rates. Each of the trends has been forecasted to have some impact on prices and investment.
"The right decison for each farmer depends on your balance sheet and finding those right opportunities, but when we look at what's happening there's been some good news stories on the demand side for beef," Klemmer said.
On Twitter: @nigelmaxwell
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