Beef Market Update: Wholesale price trouble, packer margins, and very heavy carcass weights

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The first three months of the calendar year aren’t historically much to write home about for the cattle markets, and this first week of January 2024 is living up to the ho-hum expectation.

There’s still plenty to be watching, however, and Anne Wasko of Gateway Livestock Exchange says that ample supplies of beef are definitely dragging on the market with wholesale prices dropping and packers posting some losses.

Carcass weights have come up significantly, so each animal slaughtered just adds to an already big supply of beef, and that creates a bit of concern that packers might slow production. That’s not what we need, Wasko says, on either side of the border.

For Canada, the year closed up with a lower than average for slaughter of steers and heifers, but the cow kill was up, resulting in plenty of beef to go around.

Basis prices ended the year at 6.50 under on average for December, which Wasko says is better than the 5-year average and the only month that can hold that claim year-over-year. The average basis for the year ended up 14 under the U.S. price, the poorest showing since 2014.

For domestic prices, there is some positive news for consumers which could help shore up demand: prices aren’t lower but the rate of increase has slowed (chicken did see a price decline over 2022). Beef ended the year at six per cent above ’22 levels, on average.

 

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