Canada’s long-suffering cattle producers won’t see profitable returns until late 2010 at the earliest, an industry analyst says. 
 

Cow-calf producers might see positive margins by late fall as depressed prices gradually strengthen and a reduction in Canada’s beef herd starts to take effect, said Scott McKinnon, a market analyst with CanFax, a division of the Canadian Cattlemen’s Association.
 

But even that isn’t a sure thing.
 

A global recession and a general industry malaise will make recovery slow and difficult for the depressed beef sector, McKinnon told a producer crowd during Manitoba AgDays.
 

 “Until we see economic recovery, it’s going to be a challenge,” he said to reporters following his presentation.
 

The immediate problem for beef producers is the recession. Low consumer confidence in the economy has sharply reduced the demand for beef, said McKinnon.
 

But even an economic turnaround won’t solve structural problems in the beef industry, he added.
 

“Even if we see increased demand, we’re going to have to see significant changes in the industry,” he said.

“There’s no use producing more product unless you’ve got somewhere to sell it to.”
 

Canada’s cattle producers have never fully recovered from the devastating after-effects of BSE in 2003. Adding to their problems are high feed costs, U.S. country-of-origin legislation and a strong Canadian dollar which hurts exports.
 

But the roots of the problem go back further than that, which is why producers are leaving the industry in growing numbers, McKinnon said.

“We’ve been telling them one more year for 14 years and they’re just not going to buy it. We’ve cried wolf too much.”
 

There are some promising signs. The North American cow herd has been shrinking slowly for several years. Beef supplies are down and feedlots have excess capacity to fill. Increased production likely won’t occur until 2011 or 2012, which should help boost prices if demand exceeds supply, said McKinnon.