Cattle prices in the United States are making producers there happy, but in Canada even the sales professionals can’t say what today’s prices are likely to be.
“If someone wants to sell, we’ll put a sale on, but like at Brandon and Gladstone and everyone else, nothing’s coming our way,” said Desmond Plewman, the general manager of Grunthal Auction Market in central Manitoba.
“You can’t give anyone a market trend, so they don’t bring them.”
The closing of the American border has had opposite effects on the Canadian and American markets. The cash market in Canada is a tempestuous beast, leaving producers with no clue what their cattle will fetch if they are put into the ring.
Read Also
China’s grain imports have slumped big-time
China purchased just over 20 million tonnes of wheat, corn, barley and sorghum last year, that is well below the 60 million tonnes purchased in 2021-22.
In the U.S., cash and futures prices have been predictable and are providing producers a premium due to Canada’s problems.
“It’s been a positive deal thus far for us,” said University of Missouri meat market analyst Ron Plain.
“Since May 21 it’s tightened up the beef supply here and helped push up cattle prices.”
But prices haven’t jumped as much as many analysts expected, Plain said. That’s because most American cattle feeders and market analysts expect the border to be opened within a few months, so the feeders want to scoop the premium while they can.
“Everyone’s trying to estimate when the border’s going to be reopened. We’ll be likely to have very strong prices until that happens, then quite a dip,” said Plain.
Feedlots are “pushing cattle real hard to get them to slaughter before that date, whatever it is.”
Plain estimates the bovine spongiform encephalopathy problem in Canada has added $1 or $2 per hundredweight to the price of U.S. slaughter cattle. The summer lows in cattle futures prices have been above where he expected. He had earlier expected the August futures price to trade in the high $60s US, but it is instead in the low $70s, closing at $72.95 on July 18.
Plain expects late fall and early winter prices to be lower than he earlier estimated because the border should be open and stacked-up Canadian cattle will head south.
“The market is going short term higher U.S. prices, and medium term six to nine months from now they are probably going to be lower than they would have been without the BSE situation, and I expect the real long-term outlook over three years will show no impact at all,” said Plain.
Canadian producers may be hoping that the American cattle futures market is right in guessing that the border will soon be opened, but many will be happy only when their local auction markets can offer good sales prospects again.
“It’s difficult to give prices now because one week you’ll get a couple of guys fighting over cattle and you can get a buck or a buck-ten, and the next week those guys aren’t there and you get 65 cents a pound,” said Plewman.
“Once the Americans start buying again, we’ll know what the prices are.”
Unfortunately when they do start buying again, it will be at a discount.
