Beef Market Update: Seasonal fed market declines, feeder market staying strong, and no concerns for feed supplies

The fed cattle market is off a bit, but that’s no surprise as we’re getting closer to flipping the season to fall, and as September rolls around. For this week’s Beef Market Update, Anne Wasko, from Gateway Livestock Exchange, joins us this week from a bit of vacation time on the west coast before the fall season descends.

“Seasonally the fed market declines, the cutout usually declines after Labour Day, and those things look like they are all certainly coming into fruition at this point in time,” says Wasko.

As far as our southern counterparts go, the week started at $104, but closed yesterday in the U.S. closer to $102, so that’s going to be closer to $2-3 lower than last week’s average. In western Canada, prices are also lower, it looks like trade is going to be in the low 30s, instead of the upper 30s according to Wasko, so we could lose $3-4, lower than the Alberta average this week — $224 to $225 cwt delivered.

Assuming that kills stay at good levels over the next few days, Wasko estimates that the market is seasonally down. She’s not surprised by a decline in the fed market, and the opportunities over the last couple weeks to do some management of risk in terms of hedging should counter the decline.

We’re nearing the end of the traditional barbecue season, and the fall and winter holidays are growing near. “From a cutout perspective, we saw the cutout rally higher than I think we thought the recovery would be. So we’re going to expect some settle back here post-labour day for sure,” says Wasko.

The fed market may be down, but reports out this week for the feeder market show strong prices. Western Canada continues to stay pretty solid, increasing from where the pandemic lows were earlier. Prices today are pretty much where they were at a year ago, says Wasko. Now of course as we head into the fall run there are two different markets — the yearling market, and the calf market — to watch as we get into forward delivery sales. “A word of caution, that seasonal piece for the calf market will play out this year and we’ll trend lower as we go closer to that October/November market,” says Wasko.

Kills in the U.S. and Canada have been holding pretty much where they were a year ago. September’s the month where we know there’s a lot of cattle to get through, but if the numbers hold until October, Wasko thinks we’re in considerably better shape in terms of the pandemic backlog. Placement has been key to getting out of the backlog.

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

 

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