Western Canadian feeder cattle prices were $2 per hundredweight (cwt) lower to $2/cwt higher last week. Fed cattle in Alberta reached up to $118/cwt, up a solid $2/cwt from seven days earlier which appeared to renew feedlot buying interest.
Cash barley bids in Southern Alberta were also down $2 on the week, dipping to $276 per tonne. Alberta and Saskatchewan feedlots appear to be current with production as marketing weights are now 20 pounds under year-ago levels.
Despite the improvement feeding margins and feedlot currentness, the feeder market appeared to be quite volatile depending on the region. Adverse weather tempered strength in Manitoba while markets in the major feeding regions were slightly firmer. Feather-light calves were under pressure, trading steady to down as much as $5/cwt.
In central Alberta, medium- to large-frame exotic steers weighing 525 lbs. sold for $155/cwt. Simmental-cross steers weighing just under 650 lbs. sold for $143/cwt, landed in southern Alberta feedlot. Charolais-cross steers weighing just over 850 lbs. sold for $134/cwt in the Calgary area. The U.S. market was generally $3 to $5/cwt higher with the U.S. Department of Agriculture reporting Hereford-Angus-cross steers weighing 850 lbs. selling for $152 in Nebraska. Canadian values have been lagging the U.S. market but will eventually catch up over the next couple of months. Year-to-date Canadian feeder cattle exports for the week ending Nov. 24 were 126,000 head, up a whopping 79 per cent over last year. This is no surprise given the premium of U.S. prices over Canadian values.
Wholesale beef prices remain near historical highs but consumer demand has been tempered by limited disposable income. Fast-food and full-service restaurants’ sales have been lower than expected and there is uncertainty how consumers will behave over the next couple of months. Media and politicians are blowing the "fiscal cliff" fear out of proportion, which causes consumer spending to contract and beef demand to ease.
Look for the feeder market to stay firm to slightly higher into the New Year. Ignoring the media hype, feedlot operators are optimistic for the April-May marketing period for fed cattle.
— Jerry Klassen is a commodity market analyst in Winnipeg and maintains an interest in the family feedlot in southern Alberta. He writes an in-depth biweekly commentary, Canadian Feedlot and Cattle Market Analysis, for feedlot operators in Canada. He can be reached by email at [email protected] for questions or comments.