Lower cattle prices due to big supplies, a Canadian dollar up over 80 cents U.S., and drought causing higher feed costs — Canadian cattle feeders are hunkering down as we turn the calendar into August.
“If I’m a producer at the other end of the spectrum, as far as a cow-calf producer or grass operator, I’m going to be expecting to see lower prices, but the question now is on timing, and how fast that occurs, if the feeder is still making money on current inventory,” says Anne Wasko of Gateway Livestock, noting decent profitability during the first half of 2017 could soften the impact during the upcoming fall run.
In the meantime, there are tools hedge against these expected lower prices, including the cattle price insurance program in Western Canada and forward pricing option, she notes, in this latest Beef Market Update.
From currency and North America supply, Anne and Shaun discuss the news from Japan’s government that it’s going to raise tariffs from 38.5 percent to 50 percent on frozen beef imports from Canada and the U.S. as of August 1. Australia is notably exempt from the higher tariff due to its trade agreement with Japan.
“That’s one of the things we would have gotten out of a TPP deal — consistent tariff levels, instead of this safeguard trigger that will increase the level of tariff for Canadian and American beef going into Japan. It’s an important market, so this will be impactful,” says Wasko.
Listen to Anne and Shaun’s discussion on the latest U.S. cattle on feed numbers, the climbing Canadian dollar, Japan’s tariff increase, and concerns about pasture and hay conditions, here: