Every change south affects us

Fluctuations in U.S. market can adversely effect Canadian cattle market.

Cattle tid-bits from south of the border and lest we forget — every fluctuation, change and event in the U.S. beef/cattle industry impacts the Canadian cattle market, positively or adversely — whatever the issue.

The first noteworthy morsel; a Daily Livestock Report (CME Group) stating that  strong retail and foodservice demand for ground beef (and cutbacks in fed cattle slaughter) have pushed the price of fat beef trimmings over $120 (U.S.) per hundredweight which is an all-time high. In the same report, economists (Steve Meyer/Len Steiner) reported that as consumers have shifted toward less expensive beef items (ground beef) prices in that complex have escalated, in part due to the absence of imported beef but also tight supplies of market-ready cattle.

Looking forward cattle prices are predicted to rise another 10 per cent in 2012 while cattle numbers continue to dwindle, dropping 4.2 per cent more.

In BC/Canada the situation is similar; a long list of factors beginning with BSE, then escalating with ever-increasing production costs, drought and wildfires (forced unplanned breeding herd reductions/sell outs) and topped off with an aging producer-base have combined to drastically reduce the number of market-ready cattle (available this fall); a situation that shows no sign of real recovery in the near future.The (high) price of beef/groceries impacts other businesses/industries; aptly illustrated by a recent U.S. consumer survey indicating that roughly 28 per cent (U.S. consumers) thought that rising food costs would force them to cut back on Christmas shopping.

One last thing for cattle producers to ponder or chew on (posted (11/9/2011) on Meatingplace by Tom Johnston); a report that all 3,800 U.S. Walmart stores will soon carry Choice beef. Ron Plain (U of Missouri/agricultural economics professor) told Meatingplace (11/9/2011) that “Walmart’s shift to choice will increase the choice/select spread and increase the value of the English breeds of cattle relative to continental breeds.”