To Robin Hill, the manager of Heartland Livestock Services’ Virden auction facility, this is far from a good time for Manitoba cattle auctions. That’s due to massive losses in stock markets, stemming from fears over effects the COVID-19 coronavirus could have on the global economy.
The stock markets began to tumble as COVID-19 spread across the world. That was made worse this week when Saudi Arabia and Russia started a price war over crude oil with plans to ramp up production after they failed to agree to deeper production cuts.
On Thursday, the situation plummeted after U.S. President Donald Trump announced he ordered a halt to travel from Europe because of COVID-19 fears. So aggressive was the fallout that some North American stock markets, including the TSX, imposed temporary halts to trading.
“To me, it’s like the panic button has set in,” Hill said. “The producer may want to say this will all blow over, but I’m not sure it’s going to.”
Hill said prices in the feeder market dropped US$10 per hundredweight (cwt) in the last 10 days, with the live trade down US$6-$7/cwt.
“We’re definitely seeing the stock markets heighten the effects,” he said.
Cattle producers wanting to liquidate will be scared to do so, Hill warned.
“Then there will be the group saying, ‘We’re not selling for that, we’re going to hang tight, we’re going to hang on to them for a month, hoping for better things,’” he said, with strong doubts the markets will turn around by then.
Not only were prices down this week, the numbers of cattle sent to auction were down as well.
For the week of Feb. 28 to March 5, over 9,500 head were sold, but for the week of March 6-12 there were about 5,400.