Beef Market Update: Themes in the beef market — basis, exports, and ASF

As the year winds down, the U.S. cattle market is showing strength, even with a seasonal pull back in prices, and a return to full processing capacity. Canada has been enjoying record exports to Japan, with continued demand for high quality, high grading product. But as we look ahead to the new year, it’s the brunt of the African Swine Fever outbreak that Anne Wasko says will factor heavily in to pricing of all protein.

“Seasonally, the boxed beef price is down this week, but that’s not a big surprise,” Wasko says in this edition of the Beef Market Update. “Choice was off $7 from last week, that’s $225-ish on the choice cut-outs…but I think the news is…the same week compared to last year, when the choice product averaged $212, we’ve got a $13 a hundred (weight) higher cut-out today than we did a year ago.”

If basis was the story of 2018, strong demand is the story of 2019, and Wasko says, “That’s a pretty good story when you can talk about more beef in both U.S. and Canada, and higher wholesale prices to boot.”

And what does 2020 bring? If there will be a theme it is likely centred around African Swine Fever. “Global protein prices will be and are being impacted,” Wasko says. Aussie and New Zealand trim are making it into the Chinese market, with very little of it coming here. Lean trim has been especially hit by the shift in protein supply and demand.

Hear the entire Beef Market Update, including an in-depth discussion on the demand story for high quality beef domestically and abroad:

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