Beef Market Update: Canadian market remains out of sync with U.S. market

Not for the first time this year, the Canadian and U.S. cattle market are out of sync.

As Anne Wasko explains in this week’s episode of the Beef Market Update, it’s becoming a bit of a frustrating topic, as she had hoped we wouldn’t still be talking about it in October.

Check out the full summary for what’s happening in the U.S. fed cattle market, what’s going on with the front end supply in Western Canada, what’s happening in the feeder cattle market, and more.

SUMMARY:

• This week U.S. fed cattle market went higher
• Fed cattle in the south is $145, in the north $146 to $148 live or $232 dressed. Those prices are all higher than a week ago
• The local market in Western Canada was $2 lower
• The live equivalent price that we watch, we will probably lose about a buck and will average under $180 this week
• The relationship between Canada and the U.S. is going to see our spot basis about $22 on $100 under the U.S. market. Very frustrating
• Front end supply in Western Canada is still behind, we haven’t been able to get current. That shows up in a couple of places, like carcass weight
• Steer weights two weeks ago in Canada were 958 pounds, which is 22 pounds heavier than a year ago
• The U.S. is getting into some tighter supplies faster than we expected. In Western Canada, it’s just taking longer
• With this week being a holiday week in Canada, it was a short kill week right off the bat. However, a lot are going to work this Saturday here in Canada to try to make up for that
• We have seen week-over-week fed cattle slaughter levels dropping here in the third quarter
• You’d think with a sub 73 cent Canadian dollar it would be highly supportive to Canadian fed cattle or feeder cattle prices, but the other factors listed are outweighing that impact
• Feeder cattle and calf market lost some steam this week
• Barley prices are moving up faster than the lower Canadian dollar can offset
• We’ve got very strong demand on grains, including barley. Weak Canadian dollar is pushing these grain prices higher as well
• Year over year, we saw in August a decline of 18 per cent in our exports from 2021, leaving our year-to-date number basically unchanged from a year ago
• All through 2021, which was a record export year, and the first four months of 2022, we had amazing numbers happening in terms of monthly beef exports to all of our key countries
• In August we saw a slide backwards — The U.S. was down 17 per cent, and Japan was down 32 per cent
• The whole global economy and everything that’s going on in the global stratosphere in terms of inflation and economic conditions are changing some of the patterns out there
• The one bright spot for August was Mexico, with a 20 per cent increase of trade into Mexico
• Key markets are off significantly
• As we move closer to the fact that we could be looking certainly at a recession versus stagnation, that is going to weigh on meat demand, including beef demand. That’s the story as we head into 2023

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