In the cattle industry
Number of beef cows across North America expected to continue to drop
The number of beef cattle across North America is expected to continue to get smaller in 2024, according to the latest forecast issued by Farm Credit Canada, with the number of heifers and cows being slaughtered expected to reach a new record high.
Recent higher prices for beef seen at the end of 2023 is not expected to stem the herd reductions as producers continue to deal with the impacts of droughts that have affected hay crops in the two of the last three summers.
In 2023, the number of heifers and cows accounted for 51 per cent of the animals slaughtered.
As 2024 begins, unless there is enough rain to provide a good hay and pasturing conditions, the rebuilding of herds is not expected to rebound quickly. Rather, the rebuilding process could span several year.
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In the hog industry
2024 expected to be another tough year for pork producers
This year is expected to be another tough year for Canadian pork producers, as the U.S. Department of Agriculture is predicting another 1.2-per-cent decline in production in Canada, as a global oversupply of pork persists.
According to the USDA, pork producers around the world will continue to suffer from tight profit margins that will result in a drop in the size of the number of pigs globally, including in China.
Farm Credit Canada expects Canadian producers will face tight margins into the summer month, but offer a glimmer of hope by signs of an increase in demand for pork at home as Canadians seek lower priced sources of protein.
In the dairy industry
Lower feed costs will boost profitability
Canadian dairy producers could see their profits return to pre-COVID levels this year, as feed costs stabilize, according to predictions by Farm Credit Canada.
“Feed availability and pricing – which have been extremely volatile in the last three years will be the ultimate determinant of profitability,” the FCC predicts.
With corn futures down to three-year lows, downward pressure on feed.
The FCC says producers should keep an eye on corn production estimates in the U.S. and South America for the upcoming growing season to get a sense of where the price of corn will be headed in 2024.
In farming overall
High borrowing costs weigh on equipment sales
With supply-chain issues no longer plaguing the farm equipment sector, inventory levels are expected to increase in 2024, according to market watchers.
But the industry is facing new headwinds, including inflationary pressures that are driving prices up and higher borrowing costs. The combination is pushing many producers to delay major purchases. These market conditions have cast a shadow on the outlook for farm equipment sales this year, according to the FCC.
In November, the agricultural lender reported: “A slowing of equipment sales means new inventory levels will continue to increase, returning closer to pre-pandemic levels.”
Adding: “Air drills and 4WD tractors are some of the few equipment categories where sales growth is anticipated in 2024 as delivery issues and low inventory in prior years drive sales up.”