Kay’s Cuts: Industry optimism and challenges intertwine


Steve Kay, BEEF Central (AU)



A monthly column written for Beef Central by US meat and livestock industry commentator, Steve Kay, publisher of US Cattle Buyers Weekly


LIKE their colleagues in Australia, North American beef producers are well accustomed in dealing with good news/bad news scenarios.


The latest is that severe to extreme drought conditions have returned to much of the western half of the North American continent and are impacting everything from beef cow prices and liquidation to crop prices.


At the same time, consumers and wholesale beef demand in the US and around the globe are at 30-year highs, as the US and global economies recover. The strong demand has produced a level of optimism about US cattle prices that has been largely absent for the past 18 months.


Ranchers and grain farmers in western Canada are currently grappling both with the worst drought in years, and wildfires. This northern hemisphere fall (the next five to six months), is going to be dramatic with the number of cows, that are going to come to town, and the only place for them to go is to slaughter, Bob Balog with Balog Auction Services in Lethbridge Alberta in late August  told MSN News.


The calls just keep coming from concerned producers spanning all the prairie provinces, he said. Most of the calls coming in have been about a lack of pasture. Now in the last ten days (of August), he is getting ‘lots and lots of calls’ because cattle producers are out of water. So it’s a double whammy. There is a third whammy with the fact there is very little if any hay, he said.


That in a nutshell sums up the challenges facing beef producers in Canada and much of the western US.


But the impact of drought on cull cow prices has been markedly different in the two countries...