Western Canadian feeder cattle prices were undefined this past week due to the holiday schedule and an extremely light run at major auction markets. However, the market appears to be well supported in the wake of stronger fed cattle prices, which reached fresh record highs in Canada and the U.S.
Alberta packers were buying fed cattle in the range of $156-$158 per hundredweight (cwt) while values in the U.S. southern Plains were quoted at $157-$160/cwt. Canadian wholesale beef prices continue to percolate higher, reinforcing packing margins. The summer holiday season is in the early stages and beef consumption levels are expected to increase over the next 30 to 40 days.
Feedlots have been hesitant sellers into the stronger market because the cost of replacements are uncertain. Each week the fed market is slightly higher, and secondly, if you sell larger volumes, at what price can you get these cattle back 500 pounds lighter? Markets move higher because there is limited or no selling.
South of Edmonton, in central Alberta, steers weighing just over 600 lbs. were edging closer to the $255/cwt level; replacements in the 700- to 800-lb. category were averaging $230/cwt. Very light volumes were noted, with many cattle buyers and feedlot hands on holidays. Adverse pen conditions in southern Alberta also tempered buying interest.
There are ideas that yearling cattle and early calves from Manitoba and Saskatchewan may move through auction rings sooner than anticipated due to excessive rains. Cow-calf producers want to eliminate the risk of holding cattle into the heat of summer and lighten the load of herd maintenance during this difficult time.
Lethbridge-area barley traded at $194 per tonne, up $4 from last week. The barley fundamental structure is rather tight for the upcoming crop year and the market will function so that we see U.S. corn trade into southern Alberta. However, the fed market is expected to percolate higher, which pull up feeder cattle prices into the fall period. There is no signal this upward momentum is easing.
— 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.