The reopening of foodservice, strong exports and tighter global supplies are supportive for beef demand.
‘Although there are regional delays, foodservice is slowly ramping up across North America, supporting increased domestic movement,’ says Jason Wood, provincial livestock market analyst with Alberta Agriculture and Forestry. ‘Tighter supplies of pork resulting from increased export demand are increasing the retail positioning of beef.’
The blended U.S. boxed beef price, converted to Canadian dollars, was $337/cwt for the week ending April 9, up over 10% from the previous week and over 30% higher since the start of the year. Recent weekly gains are exceeding previous projections, suggesting that the boxed beef price may exceed expectations as we move into late May.
Image 1. U.S. Blended Beef Cutout Value
‘Higher boxed beef prices are starting to benefit the U.S. fed cattle cash price. Until recently, large frontend supplies of fed cattle were dampening any upside in the cash market,’ explains Wood.
The U.S. cash fed cattle market is trading higher in April, recently at US$120/cwt after ranging between US$110/cwt to US$114/cwt through most of 2021. In Alberta, the Canfax fed steer price was reported at $150.82/cwt for the week ending April 9.
‘The fed cattle market is expected to trend seasonally higher into late spring. Fed cattle prices are expected to ease into summer as beef supplies increase and demand seasonally softens.'
Image 2: Alberta Fed Steer Prices
Globally, increased North American pork exports to China following a resurgence of African Swine Fever cases, and tightening global beef supplies due to reduced beef production in Australia, Argentina and Brazil are supportive for cattle prices. However, Wood points out that higher export container shipping costs and access to reefer containers may challenge exports in 2021.
Source : alberta