By Justin Seward
The beef industry was impacted right from the onset of the COVID-19 pandemic, as packing plants were either partially operational or shutdown for a period of time.
Many cattle were not being processed and the feedlots were backed up as a result.
“As many cattle are not being processed the number of market ready cattle increases,” said Jacob Bueckert, vice president of the Alberta Cattle Feeders Association.
“As these cattle are on feed longer they become more costly to keep. In turn processors have more animals offered to them than they are able to handle so prices start to drop.”
Bueckert anticipated the industry is behind 100,000 cattle going from the feedlot to the packing plant, which works out to two to three weeks for time.
Packers in Canada are doing “a really good job of bidding us fairly compared to the U.S.,” said Bueckert.
“What I mean by that is for us to ship cattle south, which we can do right now, whatever the cattle price is here plus freight. If we’re getting a $1.30 per pund here, we need basically a $1.36 in the States, so that we can get them there, so it’s an even price.”
Canadian cattle producers will bid down against the U.S. because packers know it will cost more money to get them to a kill plant, he added.
“They’ve been doing a good job of paying up the exact same price as the States,” he said.
“We’re actually going to get less money by shipping them because we have the freight on top. I can’t begrudge packers for not paying more in a way. You know they’re making a lot of money because they’re actually against the U.S. bidders. They’re paying us a fair price.”
Beef supply globally is very strong, he said.
“In (western) Canada, over the past 10 weeks, we’ve killed 28,000 more (cattle) versus last year, which if you add eight to 10 per cent more weight, that’s quite a bit more production, “he said.
“That means the demand is really good. I think we’re going to catch up fairly quickly with these cattle as time goes on.”
Cattle producers have been entitled to a government-initiated feed offset program that helped offset the costs of some feed in June and a set-aside program to help to hold cattle out of the market, so that processors can catch up.
“Only 5,000 head have been placed on that program so far. We’re not sure what recovery looks like as of yet, but its taking a huge (toll) on the industry,” said Bueckert.
Bueckert currently feeds 20,000 head of cattle in Warner.