Canada’s cattle sector has recorded its first year-over-year rise in herd size since 2018, challenging a prolonged contraction that has weighed on producers and markets. Statistics Canada’s livestock estimates show cattle and calf inventories at about 11.1 million on Jan. 1, 2026, roughly 2.5 per cent more than the same date a year earlier.

The increase was reflected across several classes of cattle, including beef cows and replacement heifers, indicating a modest rebuilding phase after years of liquidation linked to drought, high feed costs and strong slaughter rates. Calf numbers also moved higher, supported in part by shifts in trade flows and lower marketings in the latter half of 2025.

Despite the uptick, overall herd levels remain well below peaks seen earlier in the decade. Analysts note that rebuilding tends to proceed gradually, particularly when producers are weighing pasture conditions, input costs and price volatility. Strong cattle prices through 2025 improved margins for some operations, but elevated borrowing costs and lingering moisture concerns in parts of Western Canada continue to temper expansion plans.

Other livestock sectors showed mixed results in the latest inventory snapshot. Hog numbers edged lower from a year earlier, while sheep and lamb inventories posted gains. As 2026 begins, beef producers are operating in a tight supply environment, with demand remaining firm in both domestic and export markets.