Beef Market Update: Coronavirus rears up as second black swan in six months

If you’re looking for good news, you may not find it in the cattle markets this week. Mounting concerns over the spread of coronavirus and the global economy are starting to play a significant role.

Anne Wasko of the Gateway Livestock Exchange is considering this a black swan event akin to the fire in Kansas last fall.

“So here we’ve had two black swan events in less than six months, and this one of course just continuing as we speak today to lambaste these markets as far as the futures are concerned — and cash is following suit.”

With so much uncertainty around the virus and the markets, it’s impossible to know when or where beef markets will find their bottom. And Canada’s large supplies of beef, pork, and poultry are doing little favours in a market where movement is slowed and even halted.

In a search for optimism, producers will have to look for cues around the coronavirus slowing, says Wasko.

In other news (albeit also negative), Statistics Canada’s cattle inventory numbers for Jan 1, 2020, are out.

“The smaller beef herd continues to dominate,” says Wasko. “Canada’s beef cow herd was quoted down three per cent on the start of this year — that’s 3.56 million beef cows.”

Compared to the same time a year ago, Alberta’s beef cow herd is down four per cent, and Saskatchewan’s is down 2 per cent. Wasko says looking forward doesn’t look too prospective for the Canadian herd, with replacement heifers also down — six per cent nationally and 7 per cent for Western Canada.

Wasko says cattle feeders will likely carry on with their game plan of importing more feeder cattle from the States, and exporting fewer.

Check out the full conversation between Anne Wasko and RealAgriculture’s Shaun Haney, below:

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