Prices for cattle in Manitoba appear to have carved out a bottom, as lukewarm buying interest and a late slide in U.S. futures pointed the way lower.
Around 6,300 animals made their way to market during the week ended Jan. 19, up from roughly 3,300 the week before.
Prices were mostly similar to last week’s showing, with one of the exceptions being heavier-weight heifers, which showed continued weakness.
However, one market watcher said we may have seen the worst of the slump for now.
“It doesn’t look like we’re dropping any more than we already have dropped,” said Allan Munroe of Killarney Auction Mart.
According to Munroe, there is worry in the trade about all the heavier-weighted animals that appear headed to the summer market.
“Everyone is worried about those late-summer fats,” he explained. “That’s why we’re seeing a slide in the 700- to 900-lb. steers.”
A lot of ranchers want to get rid of their 700- to 900-lb. feeders before they hit a wall of heavier-weighted cattle in July or August, he added.
That expected glut of animals could also place challenges on feedlot operators to get them ready in time, he said.
Carcass weights are also on the increase — another factor impacting the market.
Despite the bearish scenario, Munroe said, there are still some producers who plan to hang in there.
“We will see some guys dig their heels in and hold off marketing. But most people will sell within a three- to four-week period,” he said.
This year’s calf crop is up roughly eight per cent, he noted, and a “big chunk of them” are also going to hit the market in the summer.
“For guys who bought them last fall, it’s going to be ugly,” he said.
Interest from the U.S. is low right now, with just the odd buyer coming to cattle sales.
However, he said, orders are coming in from Ontario, which should help ranchers clear out pen space.
When it comes to feed, Munroe said most producers are getting by with what they have and he doesn’t see any shortages looming.
The situation may not be quite as rosy across the border in Saskatchewan which could eventually see more cattle released onto the market.
“I doubt the guys in Saskatchewan and Alberta are going to gamble trying to find more feed to hang on to calves,” he noted.
Futures on the Chicago Mercantile Exchange had been rising for much of the week before losing steam Friday. Packers and feedlots were facing off again over prices. A lack of physical cattle trade took much of the cash transactions out of the market.