As cattle prices soar to near record levels, optimism in the beef sector is following close behind.
“There have been huge price rallies in basically everything, feeder cattle have been strong and cows and bulls have been extremely strong,” said market analyst Brian Perillat of Canfax.
“We had some weeks we averaged $80 back in 2000-2001, but it is pretty near a record.”
Cattlefax in the United States reported fat cattle hit $118 per hundredweight March 10, up $5 from the record set the previous week. Prices were collected from the six-state feeding region of Colorado, Iowa, Kansas, Nebraska, Oklahoma and Texas.
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Cull cow and bull prices are approaching records in Canada, trading at levels not normally seen this time of year. Cows averaged $73 per cwt. last week, but many auctions were trading them for at least $80.
Cull bulls hit more than $90 per cwt.
“There were some guys who sold some big old bulls for over $2,000,” Perillat said.
These mature animals typically go into the grind, where demand for ground meat across North America is strong.
Imports of lean trimmings from Australia and New Zealand are down, but more foreign product may come into the country to meet demand. Imports remain well below the 76,000 tonne quota allotted to non-North American Free Trade Agreement countries.
Grinding meat includes cull animals as well as trim derived from fed cattle. Further end meats are also entering the grind, so it is more common to see products such as ground sirloin.
Cow exports and slaughter are down 25 percent this year, indicating producers are keeping them on the farm.
“There are guys looking to get out but those cows are not getting bought up by slaughter plants,” Perillat said.
“They are getting bought up by other producers. We are a little surprised at how these guys are retaining cows versus sending to slaughter.”
However, that does not mean the national herd will grow because the 2011 calf crop is small.
“Even if we start turning around and holding cows and heifers back, we are still going to have smaller calf crops continue to show up,” he said.
On the other hand, 20 percent more bulls had gone to market by the end of 2010. Purebred sales managers say strong cull prices have encouraged producers to start replacing their breeding stock.
Bruce Holmquist ofSimmental Countrymagazine said daily production sales in Canada are reporting averages up to $5,000.
“Simmental sales have been phenomenal,” he said.
Rob Holowaychuk of Optimal Bovines Inc. in Red Deer said averages are up $500 to $1,000 per head on purebred bulls from sales he has attended.
“The good ones are bringing a premium,” he said.
Fewer purebred bred females are available this time of year, but he expects good demand as the season progresses.
Rising prices for commercial bred heifers are changing producer attitudes, but favourable prices are tempered by escalating fuel and other input costs.
High slaughter prices may also have influenced people’s decisions to change the bull battery this year.
