Description
The mid-summer slowdown has settled on the cattle markets, with cash prices retreating across North America following several months of record highs. While the pullback is largely seasonal, strong Canadian beef export performance and continued feeder cattle imports remain key storylines as the industry heads into the second half of the year.
In this Beef Market Update, Anne Wasko of Gateway Livestock Exchange joins Lyndsey Smith to discuss recent cash market declines, upcoming cattle on feed data, export trends, and the economics driving feeder cattle movement between Canada and the U.S.
What you'll hear above:
Cash cattle prices move lower across North America – U.S. live cattle traded $8 to $11/cwt lower while Alberta and Ontario dressed markets also posted significant weekly declines, reflecting typical mid-summer seasonal weakness
Futures had been signalling the correction – Discounted futures markets have anticipated larger second-half cattle supplies, with more market-ready cattle expected compared to the first half of the year
Wholesale beef values also softened – U.S. boxed beef prices declined by roughly $12/cwt, raising questions about whether lower wholesale prices could eventually filter through to consumers.
July 1 cattle on feed report expected to remain elevated – Wasko says larger on-feed inventories are being driven not only by placements, but by cattle staying in feedlots longer, increasing carcass weights
More beef without more cattle – Longer feeding periods mean the same cattle are counted for longer while producing larger carcasses, increasing beef production despite historically tight cattle supplies
Canadian beef exports continue to outperform – May beef exports increased 16 per cent year-over-year, with year-to-date exports up five per cent and export value rising 13 per cent
China is emerging as a major market – Following Canada's market reopening, exports to China and Hong Kong continue to build and are poised to overtake Japan as Canada's third-largest beef export destination in a very short time
Mexico remains a bright spot – Strong export growth to Mexico continues, supported in part by expanding retail demand, including the Costco Mexico supply agreement.
Feeder cattle continue moving north – Canada imported 39,000 U.S. feeder cattle during May, bringing year-to-date imports to 195,000 head, well above last year's pace.
Economics continue driving cattle flows – Exchange rates, feed costs, pricing opportunities, and established procurement relationships continue to support strong feeder cattle imports into Western Canadian feedlots
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