Major events and factors from outside Canada, such as the Sept. 11 terrorist attack, are having an effect on the livestock industry in Canada, including impacts on cattle prices and demand by consumers, area livestock producers were told at the annual Livestock Farm Update held Thursday.

There were around 100 producers at the day-long meeting, hosted by the Weyburn office of Saskatchewan Agriculture and Food, with a variety of topics covered by speakers and several booths set up by agri-businesses.

Update organizer Elaine Moats said the participants seemed really enthusiastic about the line-up of speakers, and the representatives in the booths were happy with the response from the producers in attendance.

The Livestock Farm Update has been successful since they split it off three years ago from the annual Rural Farm Update, which is usually held over two days in March, said Moats.

"It's a lot easier for livestock producers to participate at this time of the year," she said. The presentations included information on annual crops for greenfeed from Lorne Klein of Sask. Ag and Food, a talk on Johne's Disease by veterinarian Dr. Leanne Varley, updates on Border Line Feeders of Ceylon and Pipestone Feeders at Grenfell, a talk on pasture pipelines from PFRA representative Don Michnik, a presentation by producers Owen Pekrul of Grenfell and Dave Johnson of Peebles on how they built up a feedlot business on their farms, and a talk by veterinarian Dr. Gary Hoium on E. coli, current disease concerns and good nutrition for cattle.

Of the speakers, Moats said producers seemed impressed by the breadth of knowledge and facts of senior market analyst Anne Dunford, who provides analysis and updates to the Canadian Cattlemen's Association from their Calgary office.

In her presentation, Dunford said there were a number of factors from outside Canada that had a major impact on the industry in Canada, namely the Sept. 11 terrorist attack on the U.S., along with mad cow disease in Europe and Japan. This was coupled with the major factor on the prairies this past year of a drought affecting a wide area.

One of the effects has been large variations in cattle prices in a short period of time.

"It's been a wild year, especially in the last three months," said Dunford, giving as an example the feeder steer basis prices. The price was "disastrously low" in April and peaked high in August; following the events of Sept. 11, the prices have been on a steady decline since.

In the uncertainty of fluctuating market prices, many producers have been sending cattle to market but not keeping many heifers back to rebuild the herd, plus exports south of the border are very high right now.

"Our exports are going to be huge this year, worth about $13 billion; that's 57 per cent of what you produce that will be heading out of here. If you don't think you're affected by what's happening elsewhere, think again; everything from mad cow disease in Japan and the weather in Texas affect what's happening," she said.

Exports to the U.S. are up by six per cent, while Canadian exports of beef to Mexico are up 84 per cent and Japan is up by 32 per cent, but exports to Korea are down by 64 per cent. Of the beef exported by Canadian producers, 77 per cent of it goes to the U.S., and 12 per cent to Mexico.

Meanwhile, of the beef imported into Canada, 36 per cent is from the U.S., 21 per cent is from Australia and 25.5 per cent is from New Zealand.

On a world-wide basis, Canada only produces 2.5 per cent of the world's beef, but among exporting nations Canada ranks No. 3, said Dunford.

Beef production in Canada is up two to three per cent, while numbers of cattle are levelling off, she said. In 2002, prices will have likely peaked, and there will be a further decline in beef production, she predicted.

A possible factor in 2002 is the U.S. Farm Bill, which will be debated in January. The part which will affect cattle producers is a proposed requirement for beef to be identified as to country of origin. If this part of the bill is passed, said Dunford, it would mean Canadian cattle would have to be separated from American cattle and processed separately, although food service companies would be exempt.

"It would certainly change the scope of how we trade with them," said Dunford, adding there is a 50-50 chance the bill may not pass.

Looking at the Canadian market, beef compares favourably with competition from the pork and poultry markets, but demand is being affected and the competition will get stronger in the coming years.

Figures on pork production project a five per cent increase next year, and three per cent per year after that; poultry is projected to grow in production by three to five per cent a year over the next five years.

Retail prices for all types of meat were up this year, but most dramatically for beef, while consumption of beef is actually down. Beef prices went up 17 per cent, pork was up by 10 per cent and chicken prices went up by three per cent, said Dunford.

While consumers are eating less beef, the quality of beef has dramatically improved over the past decade. In 1992, AAA grades comprised 18 per cent of the beef in the A grades, while today 47 per cent of A grade makes the highest AAA grade. Beef weights have also been increasing, as Dunford noted the average steer weight went up from 796 pounds in 1999 to 813 pounds in 2000, and will be up again in 2001.

In the feedlot industry, Dunford said a strange situation has developed that probably won't last very long, in relation to barley prices.

"Historically there's a rule of thumb that when grain prices are up feeder cattle numbers are down, such as in 1996. This year both feeder cattle and barley prices are up; something's out of whack. There's some interesting things going on right now I don't think can last forever," she said.

Meanwhile she forecasted some "pretty heavy losses" are ahead for the feeder industry, with some of the worst losses seen in November but some price recovery since then. She attributed part of the loss to the large number of cattle in feedlots right now compared to the increasing price of barley feed grain.