Cattle & Calves

US Crop Margins

Canadian Dollar

Corn

• Corn production in Canada decreased by 3% from 2018-19 to13.4 Mt largely due to lower average yields, despite an increase in harvested area.

• Production in Canada's two leading corn producing provinces, Ontario (ON) and Quebec, decreased by 1% and 7%, respectively.

• Total production in Western Canada declined by 5% compared to last year and dropped by 23% for Atlantic Canada.

• The harvest rate in Eastern Canada was slightly higher than last year, while it was much lower in Western Canada.

• The average provincial yield fell for each province compared to last year.

Canadian Corn: Situation 2019-20

• The total supply of corn decreased by 9% from 2018-19, as a result of lower carry-in stocks, production and imports.

• Corn imports for 2019-20 into Western Canada are expected to fall sharply, because of the significant increase in barley production in Western Canada where barley is the major feed grain.

• Domestic use is expected to decrease from 2018-19 due to reduced food and industrial use, as well as lower feed use.

• Exports are expected to decrease due to lower supply and the reduced export pace to-date.

• Carry-out stocks are forecast to decline mainly due to smaller supplies.

Canadian Corn: Situation 2019-20

Barley

• World barley production and supply for 2019-20 increased to the highest level since 1994-95, according to the United States Department of Agriculture (USDA).

• Barley production increased in the major exporting countries, including the EU, Australia, Russia and Ukraine.

• World trade is projected to rise due to higher supply and increased imports by Saudi Arabia, China and Morocco.

• World carry-out stocks are expected to increase to 22 Mt from 18 Mt in 2018.

World Barley

2,502

1,502 1,195 983

1,9951,260 1,523

2,120

1,250877

7,627 7,892 8,012

10,282

7,117

8,2578,839

7,8918,380

10,400

0

2,000

4,000

6,000

8,000

10,000

12,000

Canadian Barley (mt)

Beginning Stocks Production

1,502

1,195

983

1,995

1,260

1,523

2,120

1,250

877

1,397

0

500

1,000

1,500

2,000

2,500

Canadian Barley Ending Stocks (mt)

• Barley production in Canada increased by 24% or slightly more than 2.0 million tonnes (Mt) from 2018-19 to 10.4 Mt,

– Largely due to higher harvested area

– Improved yields.

• Production reached the highest level since 2009 and compares to 10 Mt forecast by STC in September.

• Malting barley area and production for 2019 should be the highest in recent five years with good quality,

• Total supply of barley increased by 17% from 2018-19 as the increase in production is partly offset by the historically low carry-in stocks.

• Domestic use of barley is expected to increase from 2018-19, reflecting stronger feed use.

• Exports are expected to decrease slightly due to the increased supply of barley in competing countries, including countries in the EU and Black Sea region. Carry-out stocks are anticipated to increase sharply.

Canadian Barley: Situation 2019/20

85

105

125

145

165

185

205

225

20

15

20

16

20

17

20

18

20

19

Sask Feed Barley

• Livestock markets look to capitalize on reduced world protein supplies associated with African swine fever in Asia.

• Robust exports are expected through 2020. Domestic meat demand remains strong despite fears of an economic slowdown.

• A realization of strong pork exports places hog price potential at higher levels than last year.

• Feeder cattle prices may come in slightly lower than last year through the first half of 2020.

• Stronger price prospects in the second half of the year should materialize as supply moderates.

Meat Demand

US Beef Production

• U.S. beef production is expected to increase by 2 percent in 2020.

• Beef production looks to increase to 27.6 billion pounds in 2020, up 0.5 billion pounds over 2019.

• Domestic beef demand remained strong in the third quarter of 2019.

• Domestic per capita beef consumption falls in 2020 to 56.4 pounds, down 0.7 pounds from 2019.

• Beef export markets continue to build through the end of 2019.

• Projections of beef exports sit at 3.3 billion pounds, up from 3.1 billion in 2019.

• Recent strength in export markets derived from strong demand in Japan, South Korea, China, and other Asian markets.

• Fed cattle prices average near $114 in later part of 2019 but look to average near $118 in the first half of 2019.

• Feeder steer prices averaged near $163 in 2019 and current projections place 2020 prices near $168.

US Beef Production

April 2020

3,962.40

3,911.00

3,828.10

3,709.90

3,675.20

3,680.20

3,699.80

3,661.00

3,656.00

3,500.00

3,550.00

3,600.00

3,650.00

3,700.00

3,750.00

3,800.00

3,850.00

3,900.00

3,950.00

4,000.00

2012 2013 2014 2015 2016 2017 2018 2019 2020 P

Canadian Beef cows ('000 head)

518.6

557.7554.9

531.5

564.8 563.3 561.6

553.8549.5

490

500

510

520

530

540

550

560

570

2012 2013 2014 2015 2016 2017 2018 2019 2020 P

Canadian Heifers for Beef Replacement ('000 head)

3,892.10

3,977.40

3,915.40

3,776.30

3,816.103,786.60

3,746.70

3,698.90

3,651.20

3,400.00

3,500.00

3,600.00

3,700.00

3,800.00

3,900.00

4,000.00

4,100.00

2012 2013 2014 2015 2016 2017 2018 2019 2020 P

Canadian Calves, Under 1 Yr('000 head)

Beef Trade: Trade Deals • Canada was one of the first six countries to ratify the

Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) at the end of December 2018.

• This provided Canadian beef with tariff reductions in valuable export markets such as Japan.

• Canada has already benefited from two tariff reductions. • As of April 2019, Canadian beef has a tariff of 26.6 percent

in Japan compared with 38.5 percent for most favored nation (MFN) countries.

• Tariffs on Canadian beef to Japan will continue to decline annually until eventually reaching nine percent.

• Canada has already realized increased exports and growth in market share for Japan through the first half of 2019 and are on pace to see a year of record beef exports to Japan.

1,186.70

1,161.50

1,133.70

1,090.70

1,065.10

1,078.401,085.50

1,099.501,100.00 P

1,000.00

1,020.00

1,040.00

1,060.00

1,080.00

1,100.00

1,120.00

1,140.00

1,160.00

1,180.00

1,200.00

2012 2013 2014 2015 2016 2017 2018 2019 2020

Saskatchewan Beef cows ('000 head)

148.8

161

156.5

150

161.2

158.2

154.6

157.3158.2 P

142

144

146

148

150

152

154

156

158

160

162

164

2012 2013 2014 2015 2016 2017 2018 2019 2020

Saskatchewan Heifers for Beef Replacement ('000 head)

66.2

74.9

64.8

55.9 55.4 56.251.8 52.5 53 P

0

10

20

30

40

50

60

70

80

2012 2013 2014 2015 2016 2017 2018 2019 2020

Saskatchewan Heifers for slaughter ('000 head)

118.2 119.5

110

96.490.3 92.5 94.6 96.8 97.1

0

20

40

60

80

100

120

140

2012 2013 2014 2015 2016 2017 2018 2019 2020

Saskatchewan Steers, 1 Yr and Over ('000 head)

823.9

863.8

805.5

739.5

764.9775.8

736.8 736.1 739.5

650

700

750

800

850

900

2012 2013 2014 2015 2016 2017 2018 2019 2020

Saskatchewan Calves, Under 1 Yr('000 head)

167.7

173.9

168.8

165.2

169168.6

167.2

169.8

171.5

160

162

164

166

168

170

172

174

176

2012 2013 2014 2015 2016 2017 2018 2019 2020

Saskatchewan Average # Head Per Operation

65

75

85

95

105

115

125

135

145

155

165

2015

2016

2017

2018

2019

SASK D1 Cows

Cow-Calf Production Costs - September, 2019

Based on a 150 Cow Herd

Cost/Cow Total Cost Your Cost

1. Feed Costs

1.01 Grain and Concentrates $25.61 $3,842

1.02 Forages $355.10 $53,265

1.03 Salt & Minerals $37.55 $5,633

1.04 Extended Grazing Forages $29.36 $4,405

Total Feed Cost $447.62 $67,145

2. Other Operating Costs

2.01 Straw $40.00 $6,000

2.02 Veterinary Medicine & Supplies $19.17 $2,876

2.03 Breeding Costs $37.58 $5,637

2.04 Fuel, Maintenance & Repairs $37.55 $5,632

2.05 Utilities $10.84 $1,626

2.06 Marketing & Transportation $37.14 $5,570

2.07 Death Loss $19.69 $2,953

2.08 Manure Removal $7.23 $1,084

2.09 Insurance $12.91 $1,937

2.10 Herd Replacement $94.50 $14,175

2.11 Pasture Rental $60.13 $9,020

2.12 Miscellaneous $6.67 $1,001

Subtotal Operating Costs $831.02 $124,656

2.13 Operating Interest $23.89 $3,584

Total Operating Costs $854.91 $128,240