Photo supplied by Farm Credit Canada.

By Curtis Galbraith

Agriculture

Lower livestock prices expected for the rest of 2020 says FCC expert

Jul 28, 2020 | 5:30 AM

A Farm Credit Canada expert is predicting lower than average cattle prices for the rest of this year.

A report by James Bryan says prices for a 550-pound steer will be around $219 per hundredweight, below the five-year average of $242.

He says this is because of a combination of things, the biggest being shutdowns in processing that started in March.

“It did create a large backlog of the slaughter-ready animals that is still being worked through, so it’s put downward pressure on prices (at) all levels, not just those finished animals. We do still expect the price to remain below that five-year average for quite some time.”

The predicted price for an 850-pound steer is $180 per hundredweight, which would be $19 below the five-year average.

Meaningful Mementos

Remembering Someone You've Lost at Christmas

Dec 03, 2024

Seasonal Sorrow

How Do You Get Through The Holidays When You're Grieving?

Nov 01, 2024

Upcoming Events at Oliver's

Grief & Loss and Estate Planning Seminars

Oct 02, 2024

The fed steer price is predicted to be $141 per hundredweight, $20 below the five-year average.

Bryan says the backlog is clearing, but it is a slow process.

“If we look at the number of animals slaughtered in the US or processed in the US, it is running above year-ago levels, (but) it’s a slow process. Some of these facilities are quite large, so when they’re shut down for several days or weeks, it really adds to the number of animals that are in the pipeline that are getting backed up.”

Bryan’s report also predicts a market hog in Manitoba, the market most similar to Alberta’s that is included in his analysis, will sell for $67, $10 below the five-year average.

He adds economics mean that while the prices for cattle and hogs are down, the prices for beef and pork at the grocery store are up.

“So whenever those processors were shut down or before they were slowed down due to social distancing protocols that they had to take part in, that drove up the retail price because there was less available for consumers, while at the same time, reducing the demand from packers from primary producers.”

Bryan says having lower animal prices coupled with higher meat prices is not necessarily the case across the country as there are some places where producer prices are tied more closely to what the processer is paid.

He adds it is a challenging time for pork and beef producers, but it is “not all doom and gloom” as he expects a return to profitability in 2021, something he terms “re-assuring.”