Cattle market update

What we need to know

Authors

  • Anne Dunford Cattle Trends Inc, Box 23, Eastend, SK Canada S0N 0T0

DOI:

https://doi.org/10.21423/aabppro20123875

Keywords:

cattle market, grain price, economic, cattle feeding, cost, prices

Abstract

Cattle markets in North America were already showing signs of tight supplies long before the 2011 and then 2012 drought occurred in the US. In many parts of cattle producing areas in the US supplies have been tightened even further as we head into 2013. In Canada, after five years of downsizing post-ESE, the beef herd appears to be poised to see growth through heifer retention. Contrary to the US, western Canada has seen two fairly good years in terms of moisture for grass and forage production - critical to growing the herd. But higher grain prices in 2012 are having impacts on both sides of the border as higher costs have meant cattle feeding losses for much of this year. Margin operators have been caught between fewer cattle supplies/higher cattle prices and record high costs. A key concern in both the cattle feeding and cattle packing industries is that there is too much capacity chasing these fewer cattle supplies. Add to that the global economy, which has been fragile at best, and you get a very volatile environment ranging from: tight supplies = higher prices; all the way to: cautious consumers = competitive protein markets both here and abroad. Record high cattle and beef prices would have historically meant great profits but with today's cost structure (namely grains), it's not quite that simple.

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Published

2012-09-20

Issue

Section

Beef Sessions