Cattle producers struggle but beef suppliers are doing just fine
Wholesale beef prices at record levels but those strong prices haven’t made their way to producers
By Alexis Kienlen, Manitoba Co-operator (Canada)
October 6, 2021
Glacier FarmMedia – The good news is that beef prices are extremely strong, even in the face of record beef production in North America.
“We have record-high wholesale beef prices right now,” CANFAX manager and senior analyst Brian Perillat said at the recent (and virtual) Canadian Beef Industry Conference.
Unfortunately, cattle prices are just not responding.
“That’s been frustrating for a lot of producers and the industry,” he said. “But tides will change. The typical cattle cycle is: We overproduce, plug the system in terms of bottleneck at processing, and then we shrink. This will rebalance over time as the market readjusts.”
For most of the year, the beef cut-out price relative to pork was cheaper than it has been for quite a few years (largely because pork prices have risen, too).
“Overall, red meat prices have been extremely strong,” said Perillat.
And strong demand looks set to continue. The impact of African swine fever, which decimated China’s pig herd, still lingers as the nation attempts to build its domestic supply. As well, drought hit Australian production hard (dropping it from the world’s No. 2 exporter to the No. 5 spot).
Those and other factors mean there were declining global meat supplies in 2019 and 2020, which hasn’t been seen before, said Perillat...