Cattle markets in turmoil under COVID-19 fears

Cattle markets in Canada and the United States are being knocked around with uncertainty due to the threat of COVID-19.

Canada follows the United States cut-out wholesale beef price, which is soaring while live prices struggle.

“We are hearing from our producers across the country that the spread between the boxed beef side and the live cattle price doesn’t reflect the reality on the ground,” said Ethan Lane of the National Cattlemen’s Beef Association during a March 18 press conference.

There has been an ongoing issue with price discovery on the cash side and it is playing out in stark relief this week as the futures markets tumble.

“We have seen quite a bit of price fluctuation across all of the U.S. financial markets. This is not an issue that is exclusive to the U.S. cattle markets,” he said.

The Canadian situation is exacerbated by a dollar trading below 69 cents.

Purebred and commercial cattle have been moving through public auction markets, said Brian Perillat of Canfax.

“Feeder cattle markets are going with a little lighter volume as guys are holding off selling some cattle,” he said.

Markets are not that busy this time of year so social distancing is possible and managers are trying to monitor the size of the crowds.

Consumers across the country are facing empty meat cases.

“If anything packers have boosted production,” Perillat said.

Packers are making money and there is tremendous demand to restock empty shelves. Beef that was destined for restaurants could go to retail instead.

“Beef prices have gone up and cattle prices are pretty cheap so packers are running Saturdays. We operate on just-in-time inventory so they will be replenishing those shelves,” he said.

A critical control point is monitoring workers’ health at processing facilities.

“That is one of the reasons the markets are under so much pressure,” he said.

Markets are unsteady fearing the loss of a packer when there are plenty of cattle to be processed and limited shackle space.

“The futures are just tanking. They are so concerned about some kind of supply chain disruptions. They are pricing in a lot of negativity. On the other hand, there is a lot of positivity on the ground but it is not coming through very well to the cattle producers unfortunately,” Perillat said.

South of the border, the U.S. Department of Agriculture has said it will ensure food inspectors will be able to continue working to keep the supply chain moving, said Lane.

The border between Canada and the U.S. has been closed to non-essential travel but trade is expected to continue, he said.

About the author

Markets at a glance

explore

Stories from our other publications