Canadian ranchers are reducing their cattle herds amid fears of potential U.S. tariffs, a move that could further drive up beef prices in North America. Jon Vaags, a Canadian farmer, stopped buying beef cattle in November following the U.S. presidential election, leaving over 1,000 spaces empty on his feedlot, which typically houses 3,000 cattle.
The threat of tariffs comes as North American cattle herds are already at historic lows due to years of drought and rising feed costs. Canada, the world’s eighth-largest beef exporter, ships more than half of its beef production to the U.S., making it a critical supplier to its southern neighbor. However, President Donald Trump’s repeated threats of 25% tariffs on Canadian exports have created uncertainty, discouraging ranchers from rebuilding their herds.
The U.S. is facing its smallest cattle herd in 74 years, while Canada’s herd is at its lowest since 1988. This shortage has already driven beef prices higher, with ground beef prices in U.S. cities up 43% since 2020, according to the U.S. Bureau of Labor Statistics. Global beef prices have risen 34% over the same period, per the International Monetary Fund.
Tariffs would disrupt the tightly integrated U.S.-Canada beef supply chain, where young cattle are often imported from the U.S., fattened in Canada, and then sent back as processed beef. A 25% tariff could add $28,000 per truckload of Canadian cattle, making them less competitive in the U.S. market.
Farm Credit Canada, a government-backed lender, has encouraged ranchers to expand their herds to support the beef industry. However, the looming threat of tariffs has led many to hold back. Some ranchers are cashing out by sending aging cows and young breeding stock to slaughter, further shrinking herds.
The ripple effects are felt across the agricultural sector, including feed grain traders who rely on cattle farmers as key customers. Jim Beusekom, president of Market Place Commodities in Alberta, described the situation as “killing the business.”
Despite the challenges, some ranchers, like Curtis Vander Heyden, are maintaining their operations to support their workforce. “I can’t stop. We have employees. There are a lot of families depending on us,” he said.
As the U.S. struggles to meet domestic beef demand and relies on imports from as far as Australia, the shrinking Canadian cattle herd could exacerbate price pressures, leaving consumers to bear the cost.