The U.S. Department of Agriculture's report forecasts a contraction in the Canadian cattle and hog herds in 2022 due to the impact of the 2021 drought and reduced carcass weights. However, improved reproduction rates and feedlot expansion are expected to mitigate the decline in cattle numbers, supporting imports of U.S. feeder cattle. Canadian beef demand is predicted to drop, which will reduce imports, while strong local demand for protein will support exports. The Canadian swine herd inventories are also expected to contract in 2022, but overall inventory will grow due to increased sow numbers and finishing space. Live exports are projected to decline in 2022, despite the U.S. remaining a significant market for Canadian livestock.