North to Canada

While all eyes were focused on the Mexican border throughout 2025, U.S. feeder cattle exports to Canada set all-time highs. By the end of September 294,000 head of U.S. feeder cattle were exported to Canada, and the pace was set to surpass the annual record of nearly 400,000 head set in 2024.

Final year-end trade numbers won’t be available until February 1, but it’s apparent there’s a shortage of feeder cattle in Western Canada—cattle needed to meet a strong domestic demand for grain fed beef. With the Canadian cattle herd is at its lowest since 1988, feeder cattle supplies struggle to keep up with demand.

Whether U.S. feeder cattle import levels will be maintained through 2026 is anybody’s guess, said Anne Wasko, an analyst with Gateway Livestock Exchange, Taber, Alberta. She said for now, U.S. imports are critical to stabilizing the cattle feeding sector in Canada.

“Fortunately, our supplies (feedlot inventories) aren't dropping off as much as this cattle cycle would have suggested because we're bringing in more U.S. feeder cattle,” explained Wasko. “All of these pieces are connected.”

The real news, though, is that feeder cattle trade with the U.S. has flip-flopped over the past decade.

“In 2015, Canadian producers exported 500,000 head of feeder cattle to the U.S.,” said Brenna Grant, Calgary, Alberta, executive director of Canfax—a member-funded livestock market information service. “Things have turned completely around with regard to the feeder cattle trade.”

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Cowherd stability forecasted

Following a few years of below-average moisture, rainfall across much of Western Canada improved pasture conditions last year—possibly setting the stage for some herd rebuilding. Lower feed prices in 2025 also helped fuel optimism for bolstering Canadian cattle numbers.

“Heifer retention practices in 2025 and a slight increase to the breeding herd to begin 2026 will support a slightly larger calf crop,” explained Lee Schulz, chief livestock economist with Ever.Ag. “Consequently, Canadian slaughter numbers and beef production are forecast to see stability following declines in 2025.

Wasko said 2025 was overall a profitable year for Canada’s cow-calf operators. She shared that increased profitability could drive more investment in cow-calf ranching—particularly from cattle feeders looking to vertically integrate—and from younger producers wanting to enter the sector.

For cattle feeders, it was a “transition” year with both profits and losses, depending on the price at which operators placed their feeder cattle.

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As feed prices are critical to feedlot profitability, the comparative advantage in Western Canada generally lies with barley. The proportion of barley versus corn in cattle finishing rations tends to vary from year to year depending on local crop conditions.

“We had an excellent barley crop,” Wasko pointed out. “Some corn may have been contracted early on by the feedlots, but we’ll go through that rather quickly.”

Transportation costs and logistics also play a big role in shipping feeder cattle to Canada from the U.S. The larger Canadian feedlots have logistical arrangements designed to back-haul feeder cattle north after transporting fed cattle to U.S. packing plants.

Speaking of meat packing, it was definitely a “negative” year in the Canadian packing sector, according to Wasko. More than 70% of Canada’s federally inspected cattle slaughter is located in Alberta.

“The meat packers have not been making money,” she said. “And when they’re not making money, they don’t kill cattle”. Wasko noted that aggregated domestic cattle harvest levels were down 6% in 2025, following a drop of 8% in 2024.

“Heavier fed cattle carcasses have been unable to fully offset reduced slaughter volumes,” noted Canfax’s Grant. “That said, although our harvest levels are down in Western Canada, there’s no indication that packing plants here are anywhere near closing.”

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Two-way gate

As U.S. cattlemen know all too well, the U.S./Canada border has a two-way gate. In 2024, the U.S. imported 793,291 head of cattle from Canada. Expectations are that 2025 numbers will exceed those of the previous year.

Of all southbound cattle in 2024, 78% were cattle shipped for immediate slaughter. For perspective, Canadian slaughter cattle tallied just over one week’s U.S. federally inspected slaughter volume—or about 2.0% of the U.S. kill.

Grant said slaughter-ready fed steer and heifer exports to the U.S. were down 5% through October 2025. Exports of non-fed slaughter cattle—cows and bulls—were down 20% through October compared to 2024.

Feeder cattle exported to the U.S. in 2024 totaled 155,874 head, reported Ever.Ag’s Schulz. That equals 0.7% of the 22.237 million cattle placed in U.S. feedlots with a capacity of 1,000 head or more.

Volatility looming large

Wasko warned Canadian producers that price volatility could be a big part of the marketing picture as 2026 progresses.

“When we have prices as high as they are, we can have lots of volatility in the markets,” Wasko said. “We know the U.S. is short of feeder cattle and there will continue to be a lot of competition for them.”

Wasko said Canadian cattle producers are watching the southern U.S. border and the status of the U.S. feeder imports from Mexico. The ripple effects of the border closure due to the New World Screwworm could be “huge” in terms of cattle prices in Canada—and could keep cattle traders edgy.

“We’re keeping tabs on the U.S. southern border,” Wasko noted. “It all depends on when the border opens, and how rapidly it happens because we know those cattle will add to the supply in the U.S.”

And while tariff jitters plague much of the international trade scene, Canadian cattle and beef products continue to receive preferential treatment and are exempt from "trade-rebalancing" tariffs as long as they originate under the U.S.-Mexico-Canada Agreement (USMCA). That trade agreement is up for review in 2026 and there’s widespread support to keep it in its current form.

Exchange rates are always a critical factor in the cross-border trade in both cattle and beef, and play into trade volatility.

A weaker Canadian dollar relative to the U.S. dollar in 2025 lowered the purchasing power of Canadian cattle feeders trying to source feeder cattle from the U.S. On the other hand, the stronger U.S. dollar encouraged Canadians to export live cattle south. There are signs, though, that the Canadian dollar may gain some strength, which could help spur feeder imports.

Global demand up

Canfax forecasts that global beef supplies are expected to decline among all major exporters, supporting global beef prices through 2027. And increasing demand drives Canadian beef imports.

Through the first nine months of 2025, Canadian beef import volumes were up 23% from the same period last year, with the value up 28%. Imports were higher from Australia (+71%), New Zealand (+48%), the U.K. (+20%), Brazil (+18%), Mexico (+5%), the EU (+4%), and Argentina (+221%). Imports were down from the U.S. (-7%) and Uruguay (-27%).

In the end, though, strong demand for beef is buoying the Canadian cattle industry. Canfax said retail beef prices have stabilized, allowing consumers to get acclimated to current price points.

Canfax reported that Canadian retail beef demand is at its highest point since the late 1980’s, as the supply chain has responded to consumers’ preferences for a consistently high-quality eating experience.