Beef Market Update: Don’t get yourself into the “shoulda, woulda, coulda” pattern

At the 106th Saskatchewan Stock Growers Association annual general meeting, Gateway Livestock Exchange’s Anne Wasko presented on the current situation in the beef markets. The theme of the two-day convention was Strategies for Success, and in this episode of the RealAgriculture Beef Market Update, Wasko goes over just that.

She says the biggest topic she’s hearing spoke about among ranchers is the amount of drought there is and how feed will be at a low again this year — unless mother nature turns things around.

“Already we’re starting to hear things like cows being sold early, or pairs going to the market early and of course all that tends to do in drought years, as we’ve learned historically is pressure prices sooner rather than later,” she says.

When it comes to cattle of feed in Canada, things are looking good as both production and exports are up. Meanwhile, down in the U.S. it’s a bit of different picture as production is up, but exports are down.

“From a Canadian perspective, great news … especially from a value perspective, we’re not a record year in terms of volume of exports, but certainly a record year in terms of value” Wasko says. “Now in 2019, we’re dealing with the new CPTPP deal, getting great business going on into Japan, we’re also getting great business going into China (and) Hong Kong as they continue to see a shorter supplies of protein over there and Canadian beef is still really well sourced into that market.”

The U.S. remains Canada’s number one customer. The latest cattle on feed report shows an increase of 10 per cent as per the beginning of May for Canada.

In regards to managing price risk, Wasko says there’s lots of tools to help a producer out, with one being cattle insurance. She says there’s products for fat cattle, feeder cattle, and for calves and it’s worth it to look into what each offers.

“You know, you go back to look at even in March or certainly when the market peaked back in April, and it’s all based off the futures market, there was some pretty, in hindsight — the worlds pretty good in hindsight — but in hindsight, some very strong prices being offered for protection for this fall, and now today, if you didn’t pull the trigger, you’re thinking (you should have).”

With so many outside factors contributing to a volatile market, such as weather, trade, disease outbreak, Wasko says a producer needs to really break down, “What do I need to break even? What’s my drop dead line for (as far as I can go)?” and to start making a plan off of that.

Listen below to for the full interview with RealAgriculture’s Jessika Guse and Anne Wasko of the Gateway Livestock Exchange.

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