Fresh off of one of the biggest barbecue weekends of the year in Canada and headed into another in the United States, the cattle market is paying close attention to retail sales and the effect on prices throughout the supply chain.
At the same time, processing capacity has started to return following slowdowns and shutdowns due to COVID-19 outbreaks among employees.
In the U.S., trade was mostly between $115 and $120 live this week, which is looking pretty similar to last week. However, in Western Canada, there was a large jump in the live cattle prices for fed cattle, with an average sitting around the mid $140s, says Anne Wasko of the Gateway Livestock Exchange, in this Beef Market Update.
“If you think about two weeks ago, the CanFax average was at $107, that’s a huge jump. That’s almost a $40/100 live gain from two weeks ago,” explains Wasko.
This jump leaves many, including host Shaun Haney, scratching their heads. Why the jump? What is going on?
“In the U.S., and even here in Canada, we’re seeing some of these slaughter disruption improvements return to better numbers faster than many thought,” Wasko says. “So that adds a bit of an air of better news to the market’s price. And I think to talk about any of these markets in any ‘normal’ fashion — I mean we don’t have any normal capacity, we don’t have normal demand — so for me to sit here and say these are normal prices I think would be a little short,” adding that in a couple of months, once supply and demand even out more, the price will be much more stable.
The problem still is processing capacity. Many producers who sold cash cattle in the last week are wondering when that delivery will realistically be. Wasko says that based on recent Canadian Cattlemen’s Association (CCA) meetings if you were selling any cattle west of Manitoba, which many western Canadian producers were doing, they were getting kill dates of next week.
“It’s not quite as snug [in Western Canada], but certainly not as far out as one would think. I think one of the things that were associated potentially with the reason being, is that we are in that sweet spot in between finally getting a lot of those finished yearling cattle finished up, and some of these cattle that have maybe been put on a slower finishing ration aren’t quite in the mix yet,” Wasko explains. “So there’s a little bit of space in between the two, but nevertheless, the cattle slaughter dates aren’t as bad as some were maybe thinking a while ago.”