Beef Market Update: Record prices, but profitability still to be determined in back half of ’23

Even though many are looking at the futures market for ’23 new crop prices, and there’s a little more positivity across drought areas in terms of upcoming precipitation, “what’s going in the mouths of cattle today is still old crop.”

So, as a result, we’re going to have to wait until the back half of 2023 to have a better idea of what profitability will look like, even with the record prices the cattle market is seeing currently.

This is all according to Anne Wasko of the Gateway Livestock Exchange, who joined host Shaun Haney in the latest episode of the Beef Market Update.

Profitability, feed costs, choice price, beef exports, and more, are all up for discussion this week. Tune in below, or read a quick summary following the interview:

SUMMARY:

We knew we were going to be short on supplies this year, but it’s all happening very quickly
Strong demand for all these pieces coming together
U.S. fed cattle this week was another five bucks higher
This market hasn’t just grinned higher, it’s exploded higher. Why? The supply piece is strong
The other side of this is the demand side
CanFax comes out with the live equivalent later today
Dressed prices were five-to-seven bucks higher than last week in Western Canada
Carcass weights are still 44 pounds lighter than last year
When we look out our windows, there’s a few things pointing to better conditions for the 2023 crop
For January and February, Canadian beef exports are up 15 per cent in volume and up 10 per cent tin value
As we work through 2023 we will see these exports likely lage
We’re up 10 per cent in the U.S., we’re up 27 per cent in Japan, 41 per cent into Mexico, and up 82 per cent into South Korea
Those are the key main markets where most of the beef has gone so far this year
Exports and beef imports are coming into Canada for Q1 down 14 per cent
When you put the three pieces together our domestic beef tonnage production is down one per cent
So far this year exports are up 15 per cent, imports are down 14 per cent. All of that is leading to a net smaller beef supply
Producers really need to see more than a one year wonder
We’re going to need to see some length in the tooth for this one