What a week.
Frankly, the last week and even two weeks has been wild enough — let alone the last 24 hours — as the impact of COVID-19 makes its way into North American travel bans, the stock market, oil prices, the Canadian dollar and more. The volatility has been extreme.
Anne Wasko, of the Gateway Livestock Exchange, says, “This is not when you want to be making those decisions from a marketing perspective, but from a cattle producer perspective — if you’ve got cattle ready to go, they’ve got to go. There’s not a whole bunch you can do, otherwise you just make a potential to make a bad situation even worse,” she explains. “There’s just no road map for what we’re going through.”
One common thread heard from feedyards, however, is that although the futures look terrible, the basis is not too bad.
“When things are collapsing, from a North American price perspective on the cattle market, go to the Canadian basis levels and kind of take the temperature. And that’s a good way to kind of saying, ‘Okay, here’s what’s going on in Canada vis a vis the U.S. right now’. We’re actually in better shape than we were from a basis perspective last year,” she says.
There is certainly some concern over what happens to processing capacity and packing plants during this COVID-19 crisis. What happens with temporary foreign workers that are expected to arrive in the next month? What happens if a plant has to close? We don’t know what will happen yet, but it’s important to be aware and prepared, Wasko says.
Listen on for this week’s Beef Market Update, and the demand piece in the middle of a pandemic: