Beef Market Update: Holding on to a strong basis

(file photo)

The Bank of Canada raised the overnight rate target to 1.25 percent this week, with a cautionary note that touched on the uncertainty around the North America Free Trade Agreement (NAFTA).

The announcement caused brief volatility in the Canadian dollar, but will this change, or the one or two other hikes expected by economists affect cattle markets?

“It’s too early to speculate at this time,” says Anne Wasko of Gateway Livestock in this latest Beef Market Update, recorded January 19th, “but we all are…extremely, acutely aware of how good demand was in 2017, and a lot of that has to do, obviously, with how our Canadian consumers and consumers abroad for Canadian beef are feeling about their pocket books, their finances, all the rest of it.”

Wasko says changes in the economy — and anything that affects consumer finances, and debts — should be watched.

Overall, the Canadian beef industry is still seeing a strong basis, although Alberta, specifically, is seeing $1 to $4 lower for live cattle and the Canadian dollar is still sitting up around 80 cents USD.

“Significant changes, but we’re still looking at an extremely strong — albeit lower this week — but extremely strong local market.”

Export numbers from the latter part of 2017 contribute to the overall positive sentiment.

“November was a great month for Canadian beef exports,” says Wasko, adding the month saw an 18 percent increase in tonnage over November 2016.

“Year-to-date for the entire year, we’re sitting up 6 percent, but wow — ending 2017, or close to ending 2017 — November was a fantastic month.”

The market also looks good for cattle feeders on both side of the border, and at least for packers in the States, where data is a little easier to come by.

“Well, certainly U.S. packers…have been profitable all through ’17 — it’s gonna go down as probably one of their best years on average, ever.”

 

RealAgriculture News Team

A team effort of RealAgriculture's videographers and editorial staff to make sure that you have the latest in what is happening in agriculture.

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