Beef Market Update: Cautious optimism, good grass, and strong demand

Cattle prices are holding steady for most of the U.S. and Western Canada on strong wholesale demand. Ranchers, too, are cautiously optimistic as pasture and hay supplies are good and calf prices have been holding steady.

It’s not all sunshine and green grass, however, says Anne Wasko of Gateway Livestock Exchange, as there are still big unknowns looking forward in to the fall.

Looking south, U.S. prices hover around the $95 to $97 mark with Canadian cattle bringing $222 to $225 delivered, which means another week of positive basis for fat cattle. That’s a good news story, Wasko says, and not one that anyone really predicted.

“The outstanding news is what the western Canadian plants have been able to get harvested: just over 70,000 animals last week,” Wasko says. That number is the biggest since November, and some segments reached levels not seen in 10 years. Young cattle have been the focus for processing, but cow kill numbers have been getting back in line, she says, and we’re seeing a similar trend in the U.S.

Such strong processing numbers indicate that at the wholesale level demand is still pretty solid, Wasko adds.

That said, there’s still uncertainty down the road, should there be another economic shut down or interruption to trade, but today, demand is solid, and exports out of the U.S are expected to continue, and demand looks to be holding for the longer term.

“It’s a snapshot of today, and there are still hiccups and bumps on the road ahead. There’s still plenty of cattle ahead of us, but we’re doing well with the cattle we have in front of us today,” Wasko says.

On the feedlot side, there’s still a backlog of cattle to work through, but we know that March and April placements were down, so we could see some of that backlog ease for September and October, especially since processing has been so aggressive. Right now, feedyards are looking for prices to pick up some to make some profit, or we could see calf prices pull back this fall.

For more on trade numbers in May, rancher optimism, and prices, listen below or download for off-line listening later!

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