After a tough year for cattle producers, optimism for 2020

Stronger demand, lower supply expected to buoy market

There’s good reason to be more optimistic in 2020 than in 2019 in the Manitoba cattle market, according to Rick Wright of Heartland Buying Order Company.

Wright expects to see stronger demand for cattle in the spring coupled with a shorter supply.

“A better spring in 2020 than we had in the previous year. Past that, it’s all going to depend on what we get for feed,” he said.

Cattle producers will need hay, which was already in short supply in 2019, and feed grain prices must be at a good level, Wright explained.

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Throughout 2019 there was a lot of volatility, especially in the fall, he added.

“The best way I can sum it up is the prices were higher than we expected they would be, but not as good as what the sellers thought they were going to be,” Wright commented, noting those who bought cattle in the fall of 2018 and sold them in the spring really struggled.

Another challenge throughout 2019 was the weather, with a dry spring putting a major crimp into hay production. While a wet fall allowed for more grazing, the season was shorter than normal, he said.

“Instead of a 12-week fall, we had a seven-week fall,” Wright stated.

Despite that challenge and a general lack of pen space, he said the feedlots were still ready for the fall influx of cattle.

Although cattle headed west did all right, it was eastbound cattle that struggled as the demand wasn’t as strong. One issue Wright noted was the closure of Ryding-Regency in Ontario, which lost its licence due to allegations of providing false or misleading information to the Canadian Food Inspection Agency (CFIA).

Nevertheless, Wright pointed to more cattle being sold this fall than in the previous fall. And that, he said, will lead to fewer cattle being available this coming spring.

Wright also noted the United States will provide competition for Canada through the U.S.-Mexico-Canada Agreement (USMCA) and the U.S./Japan trade deal.

Despite that, “2020 will open with more positive potential than negative potential,” he said.

About the author

Columnist

Glen Hallick writes for MarketsFarm specializing in grain and commodity market reporting. He previously reported for Postmedia newspapers in southern Manitoba and the province’s Interlake region.

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