Westward movement of cattle from Manitoba was slow during the week ended June 28, as demand from the West was impacted by recent floods in southern Alberta.
Cargill’s packing plant near High River, Alta., had to close down for a few days during the week, Rick Wright of Heartland Buying Order Co. noted.
“The plant wasn’t flooded but they were having water issues and trouble getting enough workers out because a lot of their worker base comes out of Calgary and High River,” he said.
The closing of the plant had an impact on domestic slaughter cow prices, Wright said, noting values varied day by day, depending on whether or not the plant in High River was open.
But prices on age-verified cows didn’t suffer from the lack of western demand at all, because they were able to go south to the United States.
“The (Canadian) dollar crashing down so low has made it a lot more attractive for the Americans to start thinking about buying Canadian cattle,” said Wright.
The Canadian dollar was trading below the US96-cent mark for the majority of the week, even dipping under 95 cents at some points.
Wright noted that the mandatory country-of-origin labelling regulation issues in the U.S. still need to be worked out, but a sharp drop in the Canadian dollar’s value was enough to entice buying out of the U.S.
“Just the (Canadian) dollar move alone probably put one to two cents (per pound) on the exportable cows in the last week,” he said.
Feeder cattle prices in Manitoba also weren’t greatly impacted by the flood and resulting lack of western demand, because there were very few cattle being marketed during the week.
The summertime is always slow for cattle marketing, as many auction yards close down for a couple of months and farmers focus on field work. Things are expected to pick up again in the fall.
Prices on the feeder market were steady to strong, with solid demand. However, the high cost of feed was still an underlying issue.
With high feed costs, break-even levels have risen, which has left far fewer producers forward-contracting this spring and summer. Producers are waiting for cattle prices to move higher, Wright said.
So far, it looks like the feed crop will be large this fall, which could help to alleviate some of the pressure on the market.
“Everybody is expecting and speculating that we’ll have a fairly substantial crop volume-wise and quality-wise (it) could be more into the feed category,” said Wright.
The growing season isn’t over yet, however, and anything can happen to the crop. So until we get closer to harvest this fall, feed grain cash prices will likely remain very strong, he noted.
Of the feeder cattle that came onto the market, the majority stayed local, as producers were working at building up their pasture cattle. Wright noted pastures across the province are in generally good condition.
However, some localized regions have had excessive rainfall throughout the last half of June, and flooding could become a big concern for farmers in those areas.
“There is pasture land underwater and there is crop land that is underwater, and if we don’t get some relief here fairly soon we’re going to have some concerns; there’s no doubt about that,” said Wright.