"Hang on to your heifers" was the message from the editor of one of North America's leading beef market publications.
In speaking at an event in Brandon, Steve Kay of Cattle Buyers Weekly says he sees a bright future for North American cattle producers.
"You don't have to be an economist to know that when demand for product outstrips supply, there's a bright future for producers," says Kay.
He points out the per-capita supply of beef in the U.S. has seen dramatic reductions. "It's going to decline from about 61.1 pounds per person to 57.5 pounds per person in 2011. That's the smallest per-capita figure in at least 60 years in the U.S. That's got nothing to do with Americans' preference for beef. It's simply because the supply isn't available," he explains. "I look at that and say that's a fantastic opportunity for the Canadian cattle industry to become an even more vital supplier to the U.S. industry."
"Then you look on a global basis, and after coming out of the worst global recession of our lifetime, major international markets are in strong recovery. Japan is in decent recovery. South Korea is in very strong recovery. U.S. volumes to South Korea, for example, are up 135 percent this year and the value of those volumes is up 175 percent. That means global prices have increased even more than the volumes," says Kay (Note: Canada has not had complete open market access to either Japan nor South Korea since BSE was discovered in 2003.)
"I think we're in a rebound of beef demand that has outstripped people's expectations," he says. "At the same time, the global cattle industry has been flat to slightly declining."
~ Tuesday, November 16, 2010 ~