The beef price cycle certainly appears to have peaked, as Canadian cattle prices have dropped below year-ago levels in the last few weeks.
Anne Wasko of Gateway Livestock and RealAg’s Shaun Haney try to look through the fog of what’s happening in the beef market, with dropping prices and increasing protein supplies across North America, in this new Beef Market Update.
As Anne notes, there’s only one exception in the entire beef supply chain where prices haven’t dropped lower than where they were last year: the grocery store. Despite falling cattle values, October figures released by Statistics Canada this week showed retail beef prices in Canada at a record high — 13 percent higher than in October 2014.
“It’s frustrating, but it’s pretty typical,” notes Anne. “If you were sitting in the retailers’ chair all through ’14 and the first half of ’15, it was the opposite, where the cattle feeder carried the leverage and the margin, and now that’s switched. There’s always a long lag time before retail prices reflect what’s going on at the producer level, frustratingly long.”
From there, they get into packer margins, the impact the high US dollar is having on American beef exports and the need for clarity on COOL with Canada and Mexico on the cusp of implementing retaliatory tariffs.