The Canadian cattle industry is hopeful 2016 will be an expansion phase for cattle inventories — and a Statistics Canada report shows small steps in the right direction.

According the report, Canadian farmers had 12 million cattle on their farms as of January 1 this year, which is up 0.3 per cent from last year.

One of the most important numbers from the report, however, is the increase in beef heifers, according to Brenna Grant of Canfax Research Services.

As of January 1, Stats Canada reflects a four per cent year over year increase in beef heifers held for breeding on Canadian farms.

"The fact that despite dry conditions last summer producers were able to retain heifers for breeding is a really encouraging sign," Grant says, noting if it weren't for the drought on parts of the Prairies last year, they'd hoped for a bigger expansion.

"The report shows beef cow numbers were steady," she says, "that was somewhat disappointing given all of the market signals that said we should've been expanding, but given the challenges last summer, we're pretty happy with having that steady number."

Grant says we'll likely see a steady calf crop in 2016, but this likely won't show an increase in cattle supplies until 2017 and 2018.