|Herald photo by Ian Martens
Analyst Steve Meyer, president of Paragon Economics, gives a presentation on the North American livestock market as part of the Tiffin Conference Series Thursday at Lethbridge College.
Canadian cattle producers have become accustomed to surviving crisis after crisis.
They've battled E. coli, border difficulties with the United States and price concerns, to name a few. But if one analyst is correct, 2013 should be a better year for the industry.
Iowa s Steve Meyer, president of Paragon Economics, told a Lethbridge audience Thursday the coming year could leave cattle producers with fatter wallets.
"I think the prospects are generally very good for the beef industry on both sides of the border," he said Thursday at the Tiffin Conference Series: Who Needs Vegas - Dealing With Uncertainty in Agriculture, at Lethbridge College.
Meyer expects record prices this year in the United States, as the droughts of 2011 and 2012 hit cow/calf areas hard south of the border.
"We just don't have the cattle in the U.S. to keep cattle prices down," he said of the downturn in numbers, as he added the cattle supply will drop again this year. "We're expecting production to be down four per cent this year compared to last year."
Much of that drop can be attributed to one important factor.
"This is part of the livestock business assimilating itself to $7 corn," said Meyer, who added that higher cost of feed decreases supply, which invariably pushes cattle prices higher, a trend he also expects to see in Canada, as our country is closely linked with the U.S. market. "Canada is a wonderful place but when it comes to livestock markets, we're the dog and you're the tail."
With shorter supplies in the U.S., Meyer said he doesn't expect more Canadian beef will flow south to fill the market, however.
"We always import a lot of grinding beef, and we'll continue to do that," he said, as he pointed out the one area where imports are expected to remain strong.
On the price front in the United States, Meyer predicted live cattle will hit a range of $1.35 to $1.38 per pound, while cut-out choice beef could sell at $2.15 per pound.
The price of cattle reached $1.33 per pound last November on the Chicago Mercantile Exchange, while in July, the U.S. herd shrunk to its smallest level since 1973.