Cattle prices have remained strong, and by the looks of things that will continue through the summer and into the fall season.
After a couple of years of drought conditions across the prairies, low market prices, early spring blizzards, and the lack of hay, it's been a great turnaround for cattle producers with healthy cattle prices paving the way.
There's a couple of things for the strong market, says Rick Wright, Administrator for the Manitoba Livestock Marketing Association.
"One, is the inventory numbers in North America, both U.S. and Canada, are down considerably. Right now, we've got some of the smallest cow herds that we've had in the last 60 years, and so the supply won't be there for the next little while, so that's driven the price."
"And up until this past week, our export market was extremely strong and so we had super-high prices for exports. In the past we didn't do a real good job of exporting, but the Canada Beef and the Canadian Cattlemen's have done a great job of getting exposure in Japan, and then to offshore markets and they've driven the price up very, very strong."
"The other part of it is the demographics of our cattle producers is changing," continues Wright. "We're probably looking at a 58 year of age average for producers across Canada, and as they get older young people are not coming into the cattle business. So, as these sales disperse a lot of these ranches are getting tore up and being put into grain production."
"We think that, barring a border closure or a severe drought, this good market is going to be around probably 4 to 6 years," he adds.
Wright notes that we're at a crucial time right now where buying into the industry is going to cost a lot for those starting out or wanting to increase their herd. Where last year's cattle prices for bred cows went for $1500-$1800 per head (and you could buy all the cows that you'd want) now comes at a cost of $2500-$3000 with an interest rate well over 8% if borrowing money to purchase.
However, with careful herd management, good crops over North America, and steady market prices over the next 4-6 years, cattle producers will be in a good position.
Please listen to more of the interview with Rick Wright below.