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Beef, pork prices down from summer highs

CNS Canada –– As the end of summer draws near, so does the end of the barbecue season, which is expected to mean less demand for beef and pork products after a summer of significantly higher prices.

“I think summer 2014 is going to go down as extraordinary from a (beef) price perspective clear across the board, and I guess the same would hold true for pork as well,” said Anne Wasko, a marketing analyst at Gateway Livestock Group. “The demand has been much better than any of us have anticipated, especially given these record high prices.”

It’s important to note, she added, it has been a significantly great summer for beef and pork demand in Canada.

“All prices made record highs back in the month of July; if you’re going to pick a date it was right near the end of July where everything from retail to wholesale to feedlot prices to feeder cattle and calf prices all saw record highs,” said Wasko. “Now today, some of those prices are settling back at both the wholesale and feedlot, so that would be packer and feedlot levels.”

Retail prices took a little longer to reach their highs in the summer, which result in them taking slightly longer to come back down off their highs, according to Wasko.

“They’re (also) going to be much slower to come down because supplies are still going to be tight for quite some time on the beef side of the equation, so don’t anticipate a great deal of change there,” she said. “But markets today are off a little bit from where we were a month ago.”

The final summer demand will come out of the upcoming Labour Day weekend, which should be beneficial to retail prices.

“We’ve had some pretty cool, wet weather recently, so hopefully there will be an improvement in weather as we head into the Labour Day weekend,” said Wasko. “So we’ll watch that as we go forward but again, it’s been an amazing summer for beef demand whether it’s from the hamburger or meat trim grind cuts or all the way to the higher-end products; everything has certainly seen increased demand and price levels compared to what we’ve ever seen before.”

The same holds true for Canadian pork prices, which will be starting to decline after an exceptionally high summer.

“Our prices for most of the year have been well above year-ago prices, so we’ve had a very strong July,” said Brad Marceniuk, a livestock economist with the Saskatchewan ag ministry in Saskatoon.

“So we can expect prices to come down, but yeah, typically we do see some weakness this time of year. Part of that has to do with supply, (which) typically goes up, and the amount of hogs that come to market will typically increase this time of year also.”

Pork and hog prices were pushed higher this summer because of the shortage in supplies that resulted from the porcine epidemic diarrhea virus (PEDv) in the U.S., but Marceniuk said PEDv is now making less of an impact on supplies and prices.

“Last winter there were more cases, and so supplies were declining for the summer months, and so summer pricing did go up quite a bit,” he said. “And typically over the summer it sounds like the number of cases was really reduced… so we’re probably going to see a supply of hogs going to market this fall to go up a bit from where we were.”

PEDv seems more likely to thrive in colder weather, Marceniuk said. “So now the question is, will the disease pick up again this fall and will it cause supplies to decline later on in the year?

“But overall, the thing that happens in fall time is the supply typically increases a little bit so we see prices do come down a little bit from our summer highs,” he added. “It’s just that the last six months have been above normal because of PEDv, so it’s a little harder to know where prices will go.”

— Marney Blunt writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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