Just two short weeks ago, no one was really sure what was ahead for the COVID-19 virus lockdown and social distancing — but now cities are ghost towns, and grocery store shelves and coolers are suspiciously absent of some key items; beef, pork, and chicken among them.
A flurry of retail buying may have emptied shelves and driven up retail demand, but the cattle markets themselves tanked last week amid all the uncertainty. Anne Wasko with Gateway Livestock Exchange says that we’ve seen a tiny improvement in cash markets over last Friday, but there’s still plenty of volatility in the futures markets, with no end in sight.
“Who knows what lies ahead,” Wasko says in this week’s Beef Market Update.
Here in Western Canada, there was a significant jump in the price for delivered, dressed cattle that echoed the cash markets south of the border. But the spike in retail demand and prices has likely already played out in the cut-out and prices have already started to take a breather, she says.
We know there are plenty of cattle in the queue, but the demand piece now looks so very different than it did even one month ago. The food service side is hurting, for sure, even if there’s still some take-out and delivery happening, but there’s been a huge (and global) pullback in the restaurant and high-end market. It’s hard to make up that kind of value, Wasko says.
Ground beef demand has been phenomenal, but roasts and steaks are not going to move as they did before, especially once freezers are full. “We won’t run out of product… but we need the entire value chain to keep functioning, and the border open,” she adds.
Even if that happens, recessions are historically not good for the beef industry. It’s murky waters ahead for the beef industry, for sure.