Thank goodness for cattle. At least there is one market to write about with optimism.
The cattle cycle has been in the contraction stage for a couple of years and the benefits are appearing with a smaller calf crop this year.
Thanks to low feed grain prices, feeders are in the mood to fill pens.
The strength of the fed cattle market, due to excellent summer beef demand, also helps. The buoyant United States economy allowed American consumers to keep their barbecues filled with beef when they weren’t going to the nearest restaurant for a burger.
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The Asian economic recovery also promises better export demand.
The one worrisome note in this symphony of optimism is the latest U.S. cattle on feed report.
The number of cattle placed into U.S. feedlots in August was up by 17 percent over last year, raising by five percent the total number on feed as of Sept. 1.
This could lower prices when the cattle reach market weight. However, that should be short lived.
The fact is, the supply of cattle coming along to replace them is down and given the length of the cattle reproductive cycle, there is no way supply can turn around quickly.
Cow-calf producers should enjoy a good market for several years.
But the cattle market does not exist in a world of its own.
Just how good things get for cattle depends in part on markets for competing meats.
There is every expectation that chicken and pork will be strong competitors.
The hog sector is still trying to crawl out from its price-depressing oversupply and there is lots of chicken around.
To stand up to the competition, the beef industry has to become more attuned to today’s consumers. They have favored white meat partly because of the perceived health benefits, but more importantly, I believe, because of convenience.
The Beef Information Centre says research shows that one in four households plan meals on the way home from work or just before the meal. There are signs the beef industry is catching on to this need for speed.
Recently we reported that a new program by the Canadian Cattlemen’s Beef Information Centre, which identifies beef cuts and how to cook them, has helped boost retail beef sales by 3.3 million kilograms in the first six months of the year.
There are also new just-add-beef meal-in-a-box products that can be ready for the table in 10 minutes. And there are new steak marinades and tenderizers that make “problem” cuts like chuck and hip quicker to prepare.
The beef industry is turning the corner but the success of the next cycle will depend upon more innovations like these.
