According to figures released this week by Statistics Canada, as of July 1st, cattle inventories on Canadian farms had declined to their lowest level since 1994. There were 13.9 million cattle on farms as of July 1st, down 0.8% from July 1st, 2010.

Manitoba's on farm inventory stood at just over 1.3 million head as of July 1st, down from 1.35 million at the same time last year. The decrease came from a drop in the number of beef cows and calves under one year on farm. The number of beef cows on farm in Manitoba has declined about 15,000 head since July 1st, 2010 currently sitting at 499,000.

Brian Perillat, Senior Analyst at CanFax, wasn't surprised by the continued decline noting there are several factors pushing farmers to decrease their herds. He notes the lingering effects are still being felt from severe drought and the discovery B.S.E. eight years ago. More recently high feed costs and the fact the Loonie is trading at par or above with the American dollar hasn't allowed for a lot of profitability in the beef sector. Perillat says that lack of profitability until about a year and a half ago caused a lot of cow/calf producers to either liquidate their herds or exit the industry completely.

He expected numbers to continue to decline taking into account smaller beef cow herds and smaller calf crops. On the positive side, Perillat adds there was a slow down in the liquidation, and heifer retention has started to increase in Western Canada.  He notes there are a lot of heifers on farm, but the question is whether they will be retained and calve in 2012 or will they find their way into the feeding sector due to high prices.

Despite the continued declines, Perillat feels we may be turning the corner in the near future. He stresses we are not going to see anything dramatic anytime soon, but feels an expansion in the herd is possibly come January 1st, 2012 the date the next figures are to be released by Statistics Canada . He feels it's really hard to tell right now whether there will be slight growth in on-farm inventories, or if things will remain steady or possibly decrease slightly again.