Slaughter backlog hits feeders hard

It’s estimated that up to 80,000 Canadian cattle await slaughter, and the number may reach 250,000 head by July


By Barb Glen & Reuters

via The Western Producer (Canada) - May 14, 2020


There is little room for fed cattle as slaughterhouses across North America close or slow because of the COVID-19 pandemic, leaving farmers with few options for shipping their animals.


Outbreaks among plant workers have forced plants owned by Cargill Inc., JBS SA and Tyson Foods to temporarily close or slow production as they balance worker safety with food security.


“It’s a horrible situation for us to watch,” said Leighton Kolk, who normally ships 500 head of cattle to slaughter per week from his feedlot at Iron Springs, Alta.


He moved 40 head earlier in May and was not sure there would be a single bid last week, at a time when he normally sees the highest prices of the year ahead of barbecue season. Each animal that stays on his farm costs $4 per day to feed.


“The consumer is going to pay a huge price and we could approach financial insolvency because these animals are dropping in value,” Kolk said.


Ryan Kasko, chair of the Alberta Cattle Feeders’ Association, estimates there are up to 80,000 Canadian cattle awaiting slaughter, and the number may reach 250,000 head by July.


“A month ago, I couldn’t even imagine this,” said Kasko, a feedlot operator.


Brian Perillat, senior analyst with Canfax, said last week that prices for fat cattle have fallen by more than $500 per head in the last seven weeks.


“Our main buyers are off the market,” he told a May 7 online meeting of producers.


Canada is seeing record low slaughter levels and was on track to be 125,000 to 130,000 below its usual number over the past six weeks.


“The western plants are running at about 20 percent capacity. They killed under 10,000 head last week,” said Perillat.


“We’re still backing up cattle. We’re going to back up cattle for a few more months,” to the point where there could be 150,000 head of fed cattle awaiting processing by end of this month.


However, beef buyers are seeing anything but glut conditions. Some grocery stores are limiting the amount of meat shoppers can buy per visit and fast-food businesses report shortages of some items.


McDonald’s Canada recently said it would source hamburger from other countries until a shortage of its preferred Canadian product was addressed through increased processing and distribution.


Last week Canfax reported that U.S. Choice cut-out prices for beef reached a historic high of US $458.54 per hundredweight. Choice is the rough equivalent of Canada AAA beef.


However, high prices are not reaching cattle producers. Some packers offer no bids...


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