Beef Market Update: Prices edge higher on strong demand, solid processing numbers

When we last heard from Anne Wasko of the Gateway Livestock Exchange — about three weeks ago — demand was looking pretty good, and looking into the future, it looked exceptional.

Now, sitting in the future, we can safely say demand for beef is working its magic, and working at a strong pace.

“It’s been a great August in itself, and then this past week has been super in terms of where our boxed beef cutout got to. The Choice cut-out closed last night at just over $225/cwt in the U.S. That’s a $15/cwt jump from where it was a week ago,” Wasko explains.

It makes many of us ask the question: what impact has all of this had on the cash and futures price? Wasko says that from a cash perspective, the market ground higher, especially in Texas and Kansas.

“This week we gained $2 — and in some spots $3 — from last week, so most of the trade on a live basis in the south at $106-$107. In the north, maybe not quite the advantage — and when I talk north, I mean the corn belt areas — $169 draft areas, which is up a buck from the previous week,” she notes. “So I think now we are starting to see that gap narrowing as we speak. So I think stronger trade, as we are starting to get up into that second half of August.”

In Western Canada, we also saw the market stronger, and Wasko suggests that it will end up being pretty close to a dollar higher on the live average.

“The dressed trade for Alberta and Saskatchewan was at that $230-$235/cwt delivered. So there are definitely stronger markets on both sides of the border, in response to some of the good markets,” Wasko says, adding that the other point to make is that although demand is stronger, both on both sides of the border packers are getting cattle processed.

“We’ve got slaughter rates that have been in Canada pretty consistent around that 66,000 head a week, which is right about where we would have been a year ago, and we’ve been solidly there for a bit.”

The backlog that we’ve seen since the start of COVID-19 is still definitely existent, but it is something that is continuing to get chipped away at little by little. Wasko is confident that as long as these packers are operating at full capacity, we will continue to make a bigger and bigger dent into the backlog.

Check out the full Beef Market Update with Anne Wasko, and RealAgriculture’s Shaun Haney, below:

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