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Loonies Not Lucky For Livestock

Ca t t l e prices at the auction yards in Manitoba during the week ended Sept. 4 held relatively stable, although the continued appreciation of the Canadian dollar was viewed as a bearish price influence. Marketings of cattle were down a bit in comparison to the previous week’s level.

Continued poor demand from U. S. packers for Manitoba cattle, the steady free fall of Canada’s hog industry and the strength of the Canadian dollar prevented the cattle market from gaining ground, price-wise, this week.

The key issue of interest, based on conversations with cattle producers in Manitoba, is the continued appreciation of the Canadian dollar.

“Unfortunately, I don’t have any good news for cattle producers in Manitoba,” said Camilla Sutton, a currency strategist with Scotiabank in Toronto.

“The Canadian dollar is likely to strengthen towards the US96-cent level by the end of 2009 and was seen moving closer to the US97-cent area by the end of the first quarter of 2010,” she predicted.

The assumption that the global economy is on a much better footing than it was at the same time a year ago, coupled with broad-based U. S. dollar weakness and an anticipated recovery in the North American equity sector, are all factors that will help the Canadian dollar appreciate, she said.

“I know there are a number of cattle producers in Western Canada who would love to see the Canadian dollar drop back down into the US85-cent level and lower, but that just does not appear to be in the cards at the moment,” Sutton said.

She warned that as the Canadian unit moves closer to parity with the U. S. dollar, the push to make the two currencies even will pick up. “The push to parity for the currencies will be like a magnet once it begins,” she said.

There will be day-to-day, week-to-week fluctuations in the value of the Canadian dollar that could see the unit possibly weaken to as little as US86 cents, she noted, but those occurrences will likely be rare and not be of any duration.

LOOKING AHEAD

Herb Lock, a livestock analyst with FarmSense Marketing in Edmonton, felt that any light at the end of the tunnel for cattle producers is probably just the outlook for the global economic recovery.

He forecast that fed cattle prices in Western Canada should be able to hold their ground at current levels at least for a while, and potentially grind higher as time moves on.

“How much higher will that push be?… It probably will not be as much as producers would like it to be,” Lock said.

He agreed the Canadian dollar will continue to be a big hurdle, as will the downward spiral in the Canadian hog sector.

“That sector continues to get beat up and the media hasn’t done it any favours, especially with their continued coverage of the H1N1 flu situation,” Lock said.

Media coverage on the issue has certainly stirred up emotions to the point where it is frightening consumers, he said.

Feeder cattle generally have been selling above the year-ago price, he noted, while yearlings have been selling below the previous year’s level, which was a bit of a surprise given that feed grain prices are also below what they were at the same time a year ago.

Lock felt that in the big picture, there will be plenty of cow-quality feed around, especially with the lateness of the Prairie harvest this year.

Another problem for cattle producers remains the U. S. government’s country-of-origin labelling law, or COOL, which is keeping more animals in Canada than had been anticipated. “We are missing the U. S. packers from the Canadian auction yards,” he said.

FROM THE AUCTION FLOORS

Note: All prices in Canadian dollars per hundredweight (cwt). These prices also generally represent the top one-third of sales reported by the auction yard.

Ashern Livestock Mart: An estimated 592 head of cattle were sold at the sale held Sept. 2. In the slaughter market, age-verified D1 and D2 cows sold for $42-$50.50, while D3 and D5 cows traded from $34 to $42; older shelly cows, $20 and up; and good bulls, $45-$55.

Feeder steers weighing 800-900 lbs. ranged from $85 to $96.75; 700-800 lbs., $90-$103.50; 600-700 lbs., $92-$108.50; and 500-600 lbs., $95-$109.

Feeder heifers weighing 700-800 lbs. traded at $85-$95; 600-700 lbs., $88-$98.25; and 500-600 lbs., $88-$93.

Gladstone Auction Mart: The Sept. 1 sale saw a total of 426 head of cattle sold at the Gladstone yard. In the slaughter market, bulls sold from $34 to $53.25 while cows brought $20-$47.

Feeder steers in the 900-to 1,000-lb. weight category traded from $80 to $91.50; 800-900 lbs., $80-$96; 700-800 lbs., $80-$97.75; 600-700 lbs., $85-$105; 500-600 lbs., $80-$103.50; 400-500 lbs., $88-$109; and 300-400 lbs., $94-$105.

Feeder heifers weighing 900-1,000 lbs. sold from $60 to $83.50; 800-900 lbs., $65-$87.50; 700-800 lbs., $65-$94.25; 600-700 lbs., $70-$96; 500-600 lbs., $70-$97.50; and 400-500 lbs., $71-$94.

Grunthal Livestock Auction Mart: Results from Grunthal are not available.

Heartland Livestock Services, Brandon: A total of 320 cattle were on offer in Brandon during the week. A1-A2 steers went for $75-$82; A1-A2 heifers, $75-$81; D1-D2 cows, $40-$48.25; feeder cows, $35-$40; shells, $15-$35; and good bulls, $56-$63.

Feeder steers weighing 900-1,000 lbs. brought $85-$88.50; 800-900 lbs., $88-$94.75; 700-800 lbs., $92-$100.50; 600-700 lbs., $95-$103; and 500-600 lbs., $105-$114.

Feeder heifers weighing 900-1,000 lbs. sold for $80-$88.50; 800-900 lbs., $85-$90; 700-800 lbs., $85-$90.50; 600-700 lbs., $85-$93; 500-600 lbs., $88-$95; and 400-500 lbs., $95-$105.

Heartland Livestock Services, Virden: There were about 1,243 cattle sold at the sale held Sept. 2. Butcher steers brought $77-$80.50 while butcher heifers sold from $76 to $79.50. Age-verified/young cows sold for $44-$49.50; D1-D2 cows, $40-$44; D3 cows, $36-$40; shelly cows, $25-$35; and mature bulls, $56-$62.25.

Feeder steers weighing 900-1,000 lbs. brought $87-$93.50; 800-900 lbs., $90-$97.75; 700-800 lbs., $94-$104; 600-700 lbs., $97-$107; 500-600 lbs., $100-$112; 400-500 lbs., $103-$118; and 300-400 lbs., $105-$118.

Feeder heifers weighing 900-1,000 lbs. traded from $80 to $88; 800-900 lbs., $86-$93; 700-800 lbs., $86-$94; 600-700 lbs., $87-$97; 500-600 lbs., $88-$102; and 400-500 lbs., $90-$105.

Pipestone Livestock Sales: There were 369 cattle sold at the sale held Aug. 31. Included in the sale were 80 slaughter animals and 289 feeders.

In the slaughter market, D1 cows sold for $40-$45 and D2, $36-$39; D3 cows, $28-$35; and bulls, $42.75-$61.75.

Feeder steers weighing over 900 lbs. fetched $81.75-$90.25; 800-900 lbs., $85-$93; 700-800 lbs., $87-$99.25; 600-700 lbs., $90-$101.50; 500-600 lbs., $90-$105; and 400-500 lbs., $95-$101.

Feeder heifers weighing over 900 lbs. sold for $74-$85; 800-900 lbs., $77-$88; 700-800 lbs., $82-$91.75; 600-700 lbs., $82-$92.50; and 500-600 lbs., $75-$86.50.

Ste. Rose Auction Mart: A total of 358 cattle sold at the Sept. 3 sale. In the slaughter market, D1 and D2 cows ranged from $38 to $46, while D3 cows brought $28-$37 and bulls sold from $50 to $55.

Feeder steers weighing 900-1,000 lbs. traded from $86 to $93; 800-900 lbs., $90-97.50; 700-800 lbs., $90-$102.50; and 600-700 lbs., $95-$107.

Feeder heifers weighing 900-1,000 lbs. sold for $80-$86.50; 800-900 lbs., $88-$91; 700-800 lbs., $88-$94; 600-700 lbs., $90-$95; 500-600 lbs., $89-$94.50; and 400-500 lbs., $90-94.50.

Taylor Auctions, Melita: The sale held Sept. 3 resulted in 62 slaughter cattle and 100 feeders being sold. In the slaughter market, A1-A2 steers over 1,000 lbs. traded at $77-$81.50; A1-A2 heifers over 850 lbs., $75-$79; D1 and D2 cows sold from $40-$50; D3 and D5 cows, $35-$40; and good bulls, $58-$62.

Feeder steers weighing 900-1,000 lbs. brought $88-$95; 800-900 lbs., $90-$98; 700-800 lbs., $92-$109; 600-700 lbs., $95-$105; 500-600 lbs., $100-$108; 400-500 lbs., $105-$110; and 300-400 lbs., $110-$114.

Feeder heifers weighing 800-900 lbs. traded from $82 to $90; 700-800 lbs., $85-$92; 600-700 lbs., $90-$95; 500-600 lbs., $92-$98; 400-500 lbs., $95-$102; and 300-400 lbs., $100-$105.

Winnipeg Livestock Sales: There were about 260 head of cattle sold at the sale on Sept. 1. In the slaughter market, choice steers and heifers sold for $72-$75.75 and select steers and heifers for $69-$72. Dry fed cows brought $32-$42; good fleshed, $32-$37; lean, $25-$32; young age verified, $42-$49; and good bulls, $49-$56.

Feeder steers weighing 800-900 lbs. brought up to $95; 700-800 lbs., up to $101.25; 600-700 lbs., up to $106.50; and 500-600 lbs., up to $104.

Feeder heifers weighing 800-900 lbs. traded up to $87.50 and 700-800 lbs., up to $93.

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