Prices have risen significantly in the cattle business compared to those seen last year, according to some whose fingers are on the pulse of the industry.
Danny Daines, one of the owners of the Innisfail Auction Market, said on average, cattle of all sorts are selling for about a dollar per pound more than they did last year.
“The prices are skyrocketing in the cattle business right now,” said Daines.
“Prices have never been better than right now. The man that owns any type of cattle right now that is marketing is doing very, very well.”
Last fall at the auction, on average, calves that weighed 600 pounds were selling for $1.60 per pound, he said.
“This year it's $2.60 – they're a full dollar higher, so it just amounts to huge money.”
He credits the trend to the mass reopening of world markets to Canadian beef. Now that the BSE scare is long gone, he said the market that was destroyed is now starting to really move again.
The U.S. border was closed to Canadian beef for seven years, and other borders were closed even longer, he said.
“It made our cattle so very, very cheap for so long. Now it's gone the other way. We had such a kill off of so many herds of cows, and our numbers aren't where they used to be.”
Because the supply is lower and the demand has gone higher, it has created a bull market for beef producers this year, he said, adding that the Americans' supply of beef has also dwindled recently, which has only further dwindled supply levels.
The sales at the Innisfail Auction Market last week saw about 1,100 sales combined between the Monday and Wednesday auctions, he noted.
“It'll be interesting to see how long it will stay at this level…(but for farmers) keeping up with everyday bills, these cattle need to stay at this kind of money to operate.”
It would be preferable for today's prices to become the norm, assuming they don't keep rising, because producers are finally pulling in some decent profits after years of depression in the business, he said.
“When you take a breeding animal, say a cow three years ago could be bought at $1,200, now she's probably worth $2,500 or maybe even up to $3,000, these bred heifers or cows…so you can sell out of the cattle now, but if you wanted to get back in right now, you'd have to get back in at a higher level if you wanted to do it.”
He added that he's happy to see the market picking up like this after so long.
“We've always had very good cattle in this country, it's just too bad we got tainted (with BSE). It really destroyed the industry in a big way. It stopped the young people from staying in it because there was no money in it.
“We've gotta get those younger people involved,” he added, noting that many producers are aging, and that if younger people don't come along and take over from the older generation, the beef supply will continue to dwindle.
