Limits on border traffic not affecting cattle movement

Manitoba’s cattle sales continue, albeit with social distancing in mind

It wasn’t quite business as usual at Manitoba’s cattle auction yards during the week ended March 27, but cattle were still moving despite the extra COVID-19 pandemic precautions in place.

With the Manitoba government declaring a state of emergency, the livestock sector is also practising social distancing. Sales are being held, but with only staff and order buyers allowed in the sale barns. Cafeterias are closed, with no farmer traffic or general public allowed.

“They’ve locked everything down tight, but are still offering weekly sales,” said Rick Wright of Heartland Order Buying.

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“Volume is lower than normal, just because the price has been so volatile,” he added.

“Even though the public isn’t allowed into the buildings, there is as much competition at ringside as there has always been,” said Wright. “We know what the cattle are worth and it’s a matter of sorting out who gets them and what price you’re willing to pay.”

For what was still moving, “the market has been pretty competitive,” Wright said, noting butcher bulls and cows were seeing high prices due to strong demand for hamburger and a shortage of animals going to the plants.

“Feeder cattle that will hit the grass market are extremely strong,” he said.

However, animals over 750 lbs. were running into resistance, with the market getting heavier as the cattle get heavier. Everything under 750 lbs. is staying local and will probably go to grass before being sold in the late summer or fall.

Weakness in the Canadian dollar was supportive early in the week, as it traded below 70 U.S. cents. However, the currency was back above that psychological point by Friday.

Border closures due to COVID-19 were not yet impacting cattle movement, as commercial trade continues through the pandemic. Wright noted that the industry was working very hard to keep packing plants open and trade as normal as possible.

COVID-19 aside, seasonal road restrictions are reducing weight limits and altering traffic to some extent — but that happens every year at this time.

“We’re getting assurances all the time that the government is doing the best it can to keep the cattle business moving at a normal pace, which is taking a lot of worry out of the market,” Wright said.

“Both the U.S. and Canada realize the importance of the cattle industry and the food production chain,” Wright said, and “people have to eat.”

While the closure of restaurants may be limiting some demand, Wright noted the retail trade out of grocery stores has been very good. As more people get laid off, demand could decline for boxed beef, but Wright said that wasn’t being felt in the market yet.

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Phil Franz-Warkentin - MarketsFarm

Phil Franz-Warkentin writes for MarketsFarm specializing in grain and commodity market reporting.

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