Market Information

MARKET INFORMATION UPDATE

By Jamie Gamble, BFO Market Information Coordinator markets@ontariobeef.com • www.ontariobeef.com

The first half of 2020 is certainly one for the books. In 2018 and 2019, fed cattle prices traded in vary narrow ranges and generally followed the seasonal patterns. On the other hand, 2020 has done everything but. Prices started the year following seasonal trends with prices close to the last couple of years, but when COVID-19 started to rear its ugly head, the cattle markets were under pressure. In February, prices started their decline from $254.75 down to $235 dressed by the end of March, then traded sideways from $238-$240 for six weeks with a couple of weeks with no trade and little packer interest. Then suddenly, beef became the new toilet paper and people started stockpiling and depleting grocery store inventories as packing plants in the U.S. and Western Canada were shut down due to COVID-19. Boxed beef prices skyrocketed with the rail price following suit. Rail prices the week of May 15 shot up to $261.25 on average, to $274.25 on average the week ending June 4 with a high of $280 cwt. Packers collected a good number of cattle at those prices and producers were noted as pulling cattle ahead wherever possible. Following that surge, the demand dropped off and no trade or packer interest was reported for two weeks. Boxed beef prices started a sharp decline. When purchasing resumed, prices had decreased to $245 on average for one day, then down to $230 for two days and $220 for a week. At time of reporting the market is sitting anywhere from $239-$245 dressed. Seasonally prices should decline moving into the fall, but that all depends on COVID-19 and its effect on the markets and processing facilities.

Ontario federal and provincial processing volumes of steers, heifers and cull cows as of June 30 is 309,130 head, down 12.4% from the same time in 2019 and only 8% below June 30, 2018. With Ontario down one federal packer from last year – that processed approximately 10% of the cattle – this year is only slightly below 2019 but actually ahead of 2018. Given the restrictions due to COVID-19, packers have been working very hard to keep the numbers flowing.

The cull cow market has also been volatile with prices up and down, bottoming out (so far this year) the week of April 9. Prices recovered quickly with strong demand for trim, topping the market at $83.79 cwt the week ending July 2. The volume of cull cows sold through auction markets this year totals 65,723 head as of June 30, 2020 – the highest volume sold since 2013. Exports to the U.S. are up considerably from last year, 2018 and the five-year average which has been price supportive. Ontario processing volumes of cows is down from last year, 2018 and the five-year average.

Stocker volumes sold through Ontario auction markets, as of June 30, 2020, total 113,605 head, down 3.3% from 2019 at the same time, but 6.8% more than June 30, 2018. So far in 2020, stocker prices have been following the direction of the fed cattle market with prices increasing sharply and declining rapidly. At time of reporting in mid-July, heavier cattle above 700 lb. continue to trade strong while lighter weights are losing momentum. With many areas experiencing drought-like conditions we could see the fall run starting earlier this year as cattle are pulled off grass ahead of schedule.

Railgrade prices are collected by Beef Farmers of Ontario when producers phone in their price on the day of sale. The more producers who participate, the more frequent a railgrade price is available. All sales are completely confidential and only the price is shared, no other information. If you would like to participate please call the office at 519-824-0334 or toll free 1-866-370-2333 and ask for markets to report your price on the day the sale is made. Any and all participation is greatly appreciated.

We have many options to help producers keep track of current pricing, all free of charge. If you are computer savvy, the BFO website has multiple pages you can access for current market information. To access, visit ontariobeef.com, go to market reports and select from various options. Individual auction market results are posted the next day under auction market reports. A noon report is posted daily with updates from sales in progress that day. Daily and weekly reports are also posted by 4:30 pm with information on the sales of the day, other markets and the Chicago Mercantile Exchange closing figures. The daily report is available on our website, or via email or fax. The weekly report is available on our website, via email, fax and by regular mail every Friday afternoon. If you are interested in receiving any of the reports free of charge, please call the office to make arrangements.

The complete fall listing of all Ontario Auction Markets is available in this edition of Ontario Beef, and on our web site under market information. The Northern Sales Network line up is included and is now on Facebook at www.facebook.com/NorthernCattleSalesNetwork. The special stocker sales affiliated with the Northern Network encourage sellers to post pictures and descriptions of their cattle that will be on offer at a specific Northern Network sale free of charge. Interested buyers can view the uploaded pictures prior to any upcoming sales, as long as you have uploaded them to be viewed. If you have any questions or need assistance uploading pictures to the page, please email Gordon Mitchell at mitchg@vianet.on.ca or call Gordon at 705-571-1033.