Volatility to continue in beef markets

With significant price swings happening more often in beef markets, one market analyst thinks volatility will be the new norm in 2016.

At a beef and forage seminar in Vita on Monday, Sandy Russell, a partner with Spring Creek Land and Cattle Consulting, talked about these price swings, noting a 25 per cent drop in the feeder market this fall as an example.                    

"Those are significant changes in prices that producers and anyone looking to capitalize in profits has to adjust to," she says. "It definitely is the day and age of where information is at our fingertips. The market responds more quickly, and we're going to have to adjust to that increased volatility, so it's something producers have to look to manage as they go forward with their marketing plans."

While last year saw record-high prices for beef, prices fell a bit by the end of the year with larger carcass weights and more supply. Despite the overall higher prices in 2015, Russell says consumer demand stayed strong throughout the year.

"I think we're an enjoyable product that consumers definitely set aside their dollars to do some buying in beef. We know that at times we get concern because we are that high-priced product, but when it comes down to it, when they go out to dine, when they want a special occasion, they're standing behind Canadian beef producers," Russell says.

Looking ahead, Russell says it will be important to watch the start of the American grilling season with Memorial Day and the Fourth of July to set the tone for beef demand this summer.