COVID‐19 and the Canadian cattle/beef sector: A second look

After a year of adjusting to the shocks associated with COVID‐19 the Canadian cattle and beef sector faces a relatively optimistic future. This note examines the past year for this supply chain from the perspective of the consumer up to the cow‐calf producer by considering consumer reactions, labor market constraints, and supply responses. In the second quarter of 2020, the sector faced a significant challenge with continent wide shutdowns of beef packers reducing the U.S. beef supply by one‐third and Canadian beef slaughter by almost 60%. These shutdowns resulted in a sharp divergence between wholesale beef prices, which more than doubled, and fed steer prices, which declined by one third. Despite these dramatic shocks, the sector has returned to near normal conditions with prices and production levels similar to those observed prior to the pandemic. The near term prospects for 2021 are very similar to the current market situation.