Broader wholesale beef price reporting would better represent trade, says report

Criteria for Canadian boxed beef reporting should be more comprehensive and a mandatory reporting system should be considered, says a new report.

The recommendations come from a feasibility assessment of wholesale beef price reporting as Part B of the Alberta Beef Competitiveness Study. The findings were announced by Alberta Beef Producers (ABP), Alberta Cattle Feeders’ Association (ACFA), and the Canadian Cattle Association (CCA).

The report was prepared for ABP by Lee Schulz, an associate professor in the Department of Economics at Iowa State University, and Ted Schroeder, a distinguished professor in the Department of Economics at Kansas State University.

The assessment considers the history, value, and options for Canadian boxed beef reporting. It recommends expansion of current reporting criteria to be more comprehensive and suggests that a mandatory reporting system be considered.

Brenna Grant, executive director of Canfax and Canfax Research Services says “the proposed changes by Schulz and Schroeder for boxed beef reporting address changes in the market that have occurred since 2016, and many of the concerns raised by industry players.” She adds the “broader criteria would be more representative of trade.

“Confidentiality is always a concern and therefore robust participation in any price report is necessary,” says Grant. “However, there are options in how data is presented with AAA/AA cutout and primal values being the main point of a boxed beef report.”

In addition to the relative U.S. price, the relationship of boxed beef price to fed cattle prices provides an indication of leverage as it shifts up and down the supply chain, and validates fed cattle prices when volumes are thin.

A voluntary Canadian boxed beef report started in May 2003, following BSE, in recognition of the need for domestic price discovery. This boxed beef report was discontinued in March 2020, with processors citing confidentiality concerns and COVID-19-related disruptions.

Janice Tranberg, CEO of ACFA, says producers invest significant dollars into Canada Beef through the national check-off each year. “They know that the boxed beef price drives value through the supply chain. Therefore, the ability for Canada Beef to use this information in their marketing efforts is critical for both packers and producers, particularly in a weak basis environment.”

Funding for this project was provided, in part, by the federal and provincial governments through the Canadian Agricultural Partnership.

You can find the full report, here. As well, check out Part A of the Alberta Beef Competitiveness Study, here.