Beef Market Update: Uncertainty has entire value chain on edge

It’s been a difficult last few weeks in the livestock markets, to say the least. For much of the time we are all focused on making the right decision, but what has been weighing heavily on a lot of people lately has been trying not to make the wrong decision. A wrong decision in the volatile markets that we are dealing with right now could cause significant financial impacts.

Anne Wasko of Gateway Livestock Exchange says the volatility in the markets has been extreme, from day-to-day. The beef markets were on their way up, but as of today, they are back down.

“One thing to point out is that April live cattle when I last looked this morning, was at 92 cents. Of course, the cash trade that did happen in the U.S. so far has been at $1.05, so you’ve got a $13 basis in and two and a half weeks to converge those two, so it’s going to be interesting to watch and see how markets respond to the daily facts and rumours that are out there,” Wasko says.

As far as cash markets go, Wasko says they are trading $4 to $5 off of what they sold last week. In Alberta, we can expect lower prices once again, due to a lack of bids kicking around out there. Wasko adds there is plenty of pressure on the U.S. and Canadian markets this week.

As we head towards spring and warmer temperatures, we can hopefully expect more demand for beef. Wasko says it’s imperative to watch the boxed beef cutout value as it can be a bit of an indication of where we are possibly seeing demand at the retail point.

“As we talked about a few weeks ago, we had that big spike up as all the retail fill-in buying was happening after all of our stay at home orders. But since then, we’ve continued to see the wholesale price settle back off again. So last night the choice cutout in the U.S. was $222, that dropped five dollars from Tuesday, and of course if you go back to where it was a week ago, that was ten dollars lower. Again, the markets, now that we’ve kind of filled in that pipeline at the retail level, or are filling it in, the markets are trying to figure it out. We are all looking at that structural demand change.”

Check out the full Beef Market Update, below:

 

 

 

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