Calf prices “are not that far off last fall,” according to market analyst Ann Wasko of Gateway Livestock Exchange.
Prices during the fall run of calves on the market dropped and then recovered some, she told Real Agriculture in an interview.
Auction sale postings from the Assiniboia Livestock Auction show the average price for 600 to 650 pound steers started in Sept. 8 at $2.03 a pound, declining to $1.87 by mid-October, retracing to $2.01 by early November and falling to $1.98 by Nov.14.
The price volatility reflects demand from feedlot operators looking at their bottom lines and the backlog of cattle in the supply chain.
Packing plants have “done a super job’’ with 57,000 head monthly put through at 23 per cent above average.
But average weights weigh on the supply. Recent average weights of 969 pounds are 21 pounds above last year.
“We have a lot of cattle to clear through and each one is getting bigger.”
Wasko said it will be interesting to see how many cattle feedlots buy as winter approaches with higher feed costs.
However supply will be reduced in the coming weeks as the heavy fall marketings decline.
Beef demand from the food service industry has declined but retail demand from consumers cooking more at home has nicely offset the lower food service needs.
As Canadian packers focused on killing young cattle, exports of cows to the United States have increased with these exports up 33 per cent year to date “but even it’s not necessarily keeping pace and (cow) cull prices are down.”
Cow prices hanging around 70 cents a pound are at the lowest level since 2012.
Exports of beef product, needed to clear the backlog, are down in two key markets with six per cent less to the United States and 24 per cent less to Japan.
Beef cutout prices (boxed beef) in the United States have increased indicating demand for beef is still strong, but the U.S. has its own backlog of fed cattle to clear.
“It’s unknown as to where we go from here,” she said.
Ron Walter can be reached at email@example.com