See event listings and more articles in this edition of Agri-News: September 26, 2022 issue
“Although there are some concerns of increasing costs and dry pasture, there is reason to be optimistic about fall calf prices,” says Ann Boyda, livestock economist with the Alberta government. “Calf and feeder prices showed strong performance this summer, with calf prices ending the second week of September at the highest pricing in recent history, but not reaching the record highs experienced in 2015.”
Typically, the fourth quarter sees feeder prices seasonally decline with the increased supply of weaned calves. Boyda says it is safe to presume that this decline will be smaller this year. Other factors that come into play in pricing include the prospect of better grain crops this year, strong beef export demand, smaller U.S. and Canadian cattle herds and strong cattle futures.
“New-crop barley is being delivered to Alberta feedlots and replacing some of the U.S. corn. Decline in barley price through summer has recently stabilized but demand for new-crop may see a slow rise.”
As of July 1, 2022, Statistics Canada reports western Canadian cattle inventories being down 3.2% to 9.5 million head. Increases were reported in Alberta (up 1.4%); however, the increase in Alberta was expected to be greater given the drought in 2021. Breeding heifers declined across the Western provinces with Alberta reporting a decline of 9.4%. Boyda notes there are no signs of herd expansion in the U.S. either.
“Futures support a strong finish to 2022. We look to futures contract prices as an indicator of what the market thinks cattle will be worth at a specific future time. The Chicago Mercantile Exchange live and feeder cattle futures ended higher on September 2, 2022 for upcoming contracts expiring in October and December.”
The supply side is supportive of strong prices and the beef markets on the demand side have shown resilience to changes in economic conditions. For the first half of 2022, Alberta live cattle and beef (Fresh, Frozen or Chilled, incl. Offal) exports increased by 40.2% and 5.7% in volume over the first half of 2021.
“Domestically, there has been some movement to purchase of less expensive cuts but beef prices are expected to hold steady. This reinforces an optimistic outlook for fall of 2022,” says Boyda.
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Contact
For more information, connect with Anna Boyda at 780-422-4088.
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