Demand for beef has still not returned to levels seen prior to the economic recession.

"We have very strong retail ground beef prices but we still have lower values for the middle and higher-end cuts of meat," says Jerry Klassen, Winnipeg-based cattle market analyst. "We're not seeing the restaurant demand come back on stream to pre-recession levels, and we also see lower at-home food expenditures."

"We really need to see some major economic factors improve to enhance beef demand, whether it's lower unemployment numbers or rising consumer confidence," he says.

Klassen explains improvement to demand factors would give support to live cattle prices, which have been under pressure from high feed costs.

"I still think there's some higher feedgrain values coming at us here, so that is going to result in very cautious feedlot bids for feeder cattle," he explains. "We need the live cattle price to offset the strength in the feedgrains. We had April live cattle futures up to 1.04 early in September, but we've since dropped from there. If we had live cattle prices at those levels, that would support the feeder price even with 5 dollar corn or 4 or 5 dollar feed wheat. "

"With the live cattle coming under pressure, that's one thing the cow-calf producer has to watch."

~ Thursday, October 7, 2010 ~