From the Field

POINTS TO PONDER From the Field Helge By

It sure was a lot nicer picturing in January and first half of February for the bull sales than it was last year. Michael Hunter said it was 35 degrees warmer this year clipping than when they did it last year and it was still around zero this year. Wow. Outside of a couple cold weeks, it was nice calving in Western Canada. Eastern Canada had a real mixed bag of weather from cold to wet and back and forth. For most of you commercial cattlemen that haven’t started calving, you will hopefully have escaped any bad weather and I wish you all good success with your calving season.

For those following the commodity markets and in particular the meat segment, the middle of February was a roller coaster with the discovery of the Coronavirus. The markets will use any excuse to move and this one I believe got over played by the fund buyers. Here is why I saw that.

The reports from the end of January looked very positive and the fundamentals shouldn’t change much when things settle down. Using the U.S.A. market, as we are so closely tied, January turned out to have the highest domestic beef production in history. Choice boxed beef prices were the fifth highest average in history even with the record large production. The price was not far behind the 2019 levels which turned out to be the fourth highest. Beef demand is tremendous and the gross wholesale beef sales at this level of production are incredibly high.

The end of January USDA cattle inventory report was interesting. The USDA lowered the 2018 calf crop by nearly 400,000 head from the 2019 report. They also lowered the 2019 calf crop by 90,000 head. This means the large fed cattle slaughter forecasts made for 2019 and 2020 were significantly overstated. The cattle were never there in the first place. That is why feeder cattle receipts in 2019 fell dramatically short of 2018. The USDA also lowered beef cows and beef heifers by 95k head from what they reported in 2019. A summation of this is, the U.S. beef cattle industry has been liquidating and the herd size is smaller than what was widely believed in 2018 and 2019. The remaining number of feeder cattle outside feed yards is significantly smaller than a year ago and at some time this spring, when grass starts to green up and the coronavirus is a memory, it will matter.

Between the three of us at the Charolais Banner we were over 12,000 clicks of the camera shutter in the past six weeks, well over a hundred hours of video shot, over 50 bull pens toured so far, and sale season is upon us. From all we have seen, you the buyers have a tremendous selection of Charolais bulls to select from across the country. I must commend the breeders who have worked hard to breed in calving ease, calf vigour at birth and still have lots of meat and performance. As I have said before when I think back to some of the first Charolais my family raised 50 years ago, it is quite a change. Virtually, no more calving problems and no more big dumb calves that have to be helped to suck. There are Charolais bulls and bloodlines now that will calve as well as anything and still give you that identifiable product that has produced as big a premium when selling your calves as ever.

So as we get into more of the bull sales, if Robbie Chomik, Jon Wright or I can be of any assistance, please don’t hesitate to give us a call. We are always happy to help in any way we can. Most of the Charolais sale catalogues are on our website and a reminder too, that all our Charolais Banner and Charolais Connection magazines are online for free at charolaisbanner.com. If you want to go back to past issues or show your neighbours past articles, please do. We also try to keep the sale news very current on our homepage, so you can check out the latest results usually within a day of the sale.

We wish everyone a great calving season with nice weather and may the moisture conditions this summer be favourable.

Until next time, Helge