The looming glut of fat cattle expected to descend on the North American meat market this summer is already starting to be felt on the price boards of Manitoba auction marts.
Bids for heavier-weight cattle were especially under pressure during the week ended May 17, according to participants.
“Heavy cattle have been feeling the pressure for a month and have gone steadily worse,” said Rick Wright of Heartland Order Buying. “The projections for the August fats were under US$1, about as low as we’ve seen over the past six months.”
Bids for feeder steers in the 800- to 900-lb. range were starting, in some cases, at the $135/cwt level. Back in late February, those same bids were starting at $150.
“The writing was on the wall for this,” he said. “There’s lots of cattle coming so we’ll have more supply than we have demand for.”
Recent strength in the Canadian dollar, relative to its U.S. counterpart, also weighed on values, he added.
On the other side of the market, Wright said prices for finished cattle took support from steady beef exports out of Canada and the U.S.
Butcher cattle also saw improvement during the week and buying from the U.S. has improved in recent days, according to Wright.
“Some of these big cattle weighing eight (hundred pounds)-plus are finding their way into the south,” he said. “Common heifers are also finding their way.”
Meanwhile, cattle futures on the Chicago Mercantile Exchange improved last week on ideas the market was underbought. There are also ideas that the market may be near bottom right now as everyone has been hearing about the expected influx of cattle this summer for a long time. Much of the bearish sentiment may already be baked into the market.
Volumes were down on the week, much of which can be traced to farmers taking advantage of the warmer weather to get their crops in. Around 4,000 animals made their way to the province’s eight major auction marts, compared to over 5,000 the week before.
“It will stay like that for a couple of weeks until some guys get caught up on farming,” said Wright.
Rain is on the wish list for many ranchers now as they get their animals onto pasture.
So far conditions have been generally poor for the grass, said Wright.
“The temperatures have been very cold and there’s been little growth on the grass and frost is still in the ground in some areas and the pasture situation is not good. We’re going to need some improvement here fairly quickly.”