Beef Market Update: Cash cattle markets recover as futures surge

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Kind of sorted out some of the, the news and some of the policy changes and decisions that have been talked about and made and, and the markets kind of settled down or settled up. So definitely an up week. For example, Shaun, just on the live cattle futures market on the nearby, just compared to a week ago, we're up $12 on the DECE and on feeder cattle, we're up over $25 this morning on the January feeder. So markets have kind of took off a lot of that bad news or just the news of it and the shock of the news, I think just simply more clarity around some of the things. For example, Secretary Collins came out just over a week ago and was talking on a show and an interview about the, the Mexican border for feeder cattle and, you know, stress that it's going to be a slow reopening, you know, one port at a time kind of thing. And I think the market like to hear that, that it's not going to be this flood of animals. So just those kinds of things. I mean, it's, it's still a border reopening, but I think in a more. More controlled fashion. Now just to, just to ask you there, like, we had a, we had a pullback and sometimes with the pullback, it can be healthy for a market. It. Does this mean that we go to a new, higher level from here or like, how do we take this rebound that we've seen this week? I just, you know, want to put that in perspective. Yeah, I think, you know, certainly with how that market came down, there's lots of gaps above us from a Technical perspective, perspective that are, are to be filled or some to be filled at least. So that's part of it on the technical side. And then yeah, certainly it's just. I still think the markets are going to find their spot, but at the same time we've still got these, these issues to deal with. So you're right, nothing goes straight down or straight up. And, and that's how the markets always move to the next level. So we've probably seen the highs I think for now, but we can, we can certainly, you know, work our way back towards where the market should be based on the straight up fundamentals. So yeah, and so this week out the market found some good news to trade on and, and just rolling that into the cash cattle market, Shaun, this week in the northern markets, we traded mostly at 220 live. That's 10 to $12 higher than last week. 340 to 345 delivered dress. That's up 10 to 15 bucks from last week. So we've almost recovered the full loss that we've seen over the past two weeks on cash cattle. Haven't seen any southern trade, but I think you'll see that today and it will certainly be higher. That cut out that choice market that we talk about, Shaun. It's struggling still. 550 lower than a week ago. So that was just before Thanksgiving. So it closed last night at 362.75. I do think this is good support going forward. It's not really a time to rally the beef market at this point in, in the calendar year, but it should find support here. And with our smaller kills that we're going to get over holidays, Christmas, New Year's, that'll be supportive, I think, to the beef complex. So we'll keep an eye on that. And then just to finish off on the cash news, Alberta cash 5 to 10 higher this week on the dress market. So that's 485 to 490 delivered. And there's some live bids kicking around in the mid-290s, so better markets all the way around and that's going to have everybody in a better mood. Anything further to draw from the fact that cut out number, the cutout prices are kind of lagging a little bit. It's a, it's something to watch, Shaun, for sure. If, if it can't get some legs or at least find some solid support in here, I think that'll be something that we want to watch. But I think it's too early to say that. It just kind of ran into wrong time, wrong place. We'll get, we'll get back into the seasonals, I think once we flip the calendar, which means that this is kind of what the cutout does, you know, once we get past Thanksgiving. So I don't think so, but it's certainly on something on my watch list. Like, like, it doesn't mean that demand is, is, is wavered here at this point. Right. It's. It's one number, one week. You know, we've had kind of a crappy month, but we have on the cash cattle too. So I don't think it's something yet. But again, that's the watch signal. Yeah. One thing that's grabbed a lot of headlines is this plant closure by Tyson. Now that we're more than a week away from that announcement, seems to be a lot of news coming out that this closure makes a lot of sense from just a market structure standpoint. What are your thoughts as you look at it and review the decision? Yeah, no, I think for sure, first of all, lots more capacity right now, given where we are in the cattle cycle, than we have for cattle numbers. So I think Tyson, obviously looking at where they had shackle space and that made sense to close one and fill others that they weren't filling. So that, that's, you know, obviously a business decision and it will mean one less buyer in those areas. And that does have an impact, you know, through the year. Shaun, we talk about leverage a lot and so it will have an impact to leverage as we go into 2026. And that was something that really helped the markets get as high as they did in 2025. So, again, lots of capacity still out there, given what we have for caval numbers and the projections for 2026. Now, in a couple weeks, you and I'll probably do like a year in review, like we always do, and start to look ahead. And what does an Wasco want for Christmas? But the year really I with what's the storey of this year is like, is it demand? It is. Okay, it is. I know, and that's my opinion. I think lots of people will point to the cowherd, the smallest cowherd since, you know, 1961, whatever. But the supply storeys an easy one to get our hands around, as people will say. But we've seen with imports, you know, really at the end of the day, when you look at how much beef is being offered to consumers in the US or Canada, it's about the same as what it was last year. So. And our prices yet are substantially higher. So that is clearly a demand storey in my book and I think that's a good storey. You stop and think we did see. So one, one item that we are getting from Stats can right now, they did release October retail beef prices this week for the fourth month in a row, we're sitting not quite at the record high. We had it back in July, but 2515 per kilogramme, that is 16% above last year. But it is 3% below that high in July. So it, to me it looks like again, I think it's a little too early to say. Were these the highest highs for retail beef prices? Possibly. Maybe we have one more run at it next year. But to me it's just saying that we've got these prices to these levels. If you're trading beef that much higher than last year, there's something going on with demand and we've got lots of product. Beef, chicken, pork. Consumers have got lots of choices when they go into that counter and guess what they're choosing or they continue to choose is beef. I think, I really think it's a demand storey again. And I think producers need to fully understand this isn't all just about supply and the cowherd being smaller. This is a super, super demand storey. Went out for dinner last night. There were six of us. Every single person at that table, all six of us ordered steaks. There's a demand for beef. Yeah. Lots of options on the menu. Yeah. And look at, you know, there's a quality piece there too. Shaun. The. The kill today is over 85 choice or higher. Producers are producing quality beef in both the US and Canada. High grade quality, good eating experience. Why wouldn't you order a steak? Yeah. To wrap up here, I want to get your thoughts. Something I've been saying in some of my p. My speeches the past three, four weeks is there's a lot of focus on lack of profitability in the cropping sector. There's some farm management challenges there. But if we look in something like the beef sector where there has been good margin, of course for the rancher as well as the cattle feeder, that also can be a difficult point to. That's a farm management issue too because you're at the kind of the higher point of the profit cycle, complacency can set in trying to manage the risk. Do I expand? Don't I expand? Is this the time to do that or not? There's challenges at that on this part of the cycle too. For the producer right now, of course, the cattle cycle. We talk about this 10 to 12 year cycle. These prices and these profit levels are long overdue, especially for the cow calf producer. Absolutely. But they, but they know, we all know the cattle cycle will carry on. And so this is that time in the cycle where you, you do what you need to do, whatever it might be in terms of, you know, paying down debt or improving the herd or buying equipment, you know, whatever it might be, because you know, the next round is there's going to still be some tougher years ahead. So. And, and we haven't even talked about weather and I did listen to some of your weather forecasts this week. Some of the people you had on and that's another thing to keep an eye on. But yeah, this is when you get the house in order. On the flip side, of course, this is, this is the time 2025 will be one of the worst years for packer margins in history. So. But again, that's kind of what the cattle cycle says. So I would say the cattle cycle is very much alive and well in terms of numbers and profitability. And thanks so much for joining us here today. Really do appreciate it. We'll talk to you again in a couple weeks. Thanks, Shaun. You too. 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