Beef Market Update: Drought induces early sales as slaughter numbers skyrocket

There’s a lot of ground to cover in this week’s Beef Market Update, including price activity, cut-out value, demand, cash prices, and more.

Anne Wasko of Gateway Livestock Exchange joins host Shaun Haney to break down all these topics.

In the U.S., prices are still doing a see-saw action and the market’s held on remarkably well for this time of year, says Wasko — in the south, that number was $118 to $119 live and in the north, $120 to 125.

“The choice cut-out, the wholesale price that we always watch, (was) $266 at the close of this week, off three from last week,” says Wasko. Tracking the decline, from early July, it’s only off about $20 and, going back to the beginning of June, it’s about $75 lower. Wasko thinks it’s the kind of level that some support will be held at, and trade can continue at for a bit.

How demand shapes up through the rest of the summer will be influenced by restaurant re-openings in the U.S. and Canada, she adds.

Cash prices locally have been under some pressure  — $250-254 delivered were the bids yesterday  — and it’s been pretty quiet this week. Wasko says the average will be in the low-$150s, again making some assumptions for the rest of the month, the July average in Alberta will be ten dollars lower than in June.

Hear the full conversation below, or download for later:

One of the big discussions in the feedyard is surrounding lack of availability and feed costs, but corn isn’t exactly cheap, either.

“I think we can basically write barley off as one of those feedstuffs, just looking at spot barley prices today, they’re at all-time record high levels,” says Wasko. “That, and we’re not waking up overnight to this surprise, we’ve known for quite some time that we’re going to be looking at some certainly tighter supplies in North America on the grain complex, and higher prices.”

Tremendous stress is felt among ranchers across Canada, and they’re having to make really difficult decisions about their herds. Auction sales both in the ring and on the internet are picking up in volume pretty substantially, says Wasko, adding that she saw 8,000 head in a western sale, which for the middle of July is not normal.

“There’s no question in the live rings, that you’re seeing and hearing, especially in areas that are so dry, cows being forced to town, and as soon as cows and calves are split, they will be,” says Wasko.

Slaughter numbers are a bit staggering, and Wasko suspects that last week was the biggest week of the year, nearly reaching 73,000 head, the largest in almost 10 years.

“The good news is that we’re coming into this almost squeaky clean, we’re not using those words of carryover or backlog or anything like that this year,” says Wasko.

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