Calling All Culls

Cull cow and bull prices have transitioned from strong to red hot over the last few weeks. The market is certainly calling for available cull animals to move to market. There are many factors on both the supply and demand side of the cull market that have been price supportive. Somewhat like the fed market at the end of the first quarter, the Canadian cull market didn’t quite have the price rally that was generally expected. Prices were strong, and this kept cows coming to market in an orderly fashion in both the US and in Canada for the first part of this year which delayed the spring rally. The strong early year marketing numbers has led to a further tightening of current supplies and is supporting prices. Although the strong trim prices have attracted significantly more imports into North America, peak demand and a currently reduced North American cow slaughter is driving prices higher. The lean fine textured beef fiasco that hit the trim markets earlier this year has also driven up the demand for ground beef from cull animals.

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With top end D1/D2 cows bringing over $90/cwt, and cull bulls bringing $110/cwt, we are certainly into unprecedented times. The weakening Canadian dollar is also adding additional fuel to this rally. Based on the seasonality index, cull prices tend to peak in April or May, and pull back slightly as we head into the dog days of summer. Increasing supplies of fed cattle in the summer also reduce competition for non-fed cattle. It is not uncommon to have the strong cull prices in early June, and although the Canadian cull cow market remains well supported, we may be close to a near term peak where cow prices may come under some pressure in the short term before rallying back later in the summer.

 

Brian Perillat, Canfax

BRIAN PERILLAT grew up on a mixed farming operation near Duck Lake Saskatchewan. Brian continues to stay involved in the family farm, with his land and cattle. Brian has always had a passion for agriculture, especially the beef industry. Brian earned an undergraduate and Master’s Degree in agriculture economics from the University of Saskatchewan. Brian has since worked as a livestock production economist with Alberta Agriculture, working on cost of production studies and other economic projects. Brian also spent over 4 years working with Meyers Norris Penny as a farm management consultant. Brian started as the Canfax manager in the spring of 2010. Brian is committed to building on Canfax’s reputation of collecting, maintaining and reporting independent cattle market information for its members, and industry stakeholders. Brian enjoys traveling and has the privilege to spend nearly a year working on farms and stations in Australia and New Zealand, as well as visit farms in Tunisia and The Gambia, in North and West Africa.

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