Cattle prices remained firm at Manitoba auction marts during the week ended June 9. Bids for steers (400-500 lbs.) rose $3-$5 per hundredweight on average with other lightweight animals also showing slight improvements. The heavier-class animals posted gains with heifers (600-700 lbs.) rising roughly $5-$10.
“All the classes look strong; some guys are making $400 and $500 a head on some of these cattle,” said Herb Lock of Farm$ense Marketing in Edmonton.
On the slaughter end, bulls were mostly steady to $2 higher in some cases. Younger cows that were suitable to be turned out to pasture were selling at a $10-$15 premium to the butcher cows, according to one of the outlets. The quality of the animals may have been slightly diminished in some cases, but the prices hung firm.
The strength in price is fuelled by consistent demand for Canadian cattle, Lock added. “We just don’t have enough meat to serve the demand.”
On the live cattle side, he said, the futures market is trailing the cash.
“It’s an opportunity for sellers to short the board and wait for fall to deliver and sell then,” he said. “So the risk management opportunities are phenomenal.”
The rise comes at a time when many producers likely wished they had more animals to sell. Cattle marketings in Manitoba on the week were around 3,350 head, down from the previous week’s 4,387. Some outlets have just one sale left until the summer season begins.
“Everybody in the chain is doing very, very well,” said Lock. “It’s a rather odd situation in the cattle industry for all the players to be doing well.”
One worrisome sign for growers in southern Manitoba, though, may be the recent dryness setting in on grasslands.
“Feed is spotty; parts of Manitoba and southern Saskatchewan are very dry,” he said. “It’s too early to call for a drought but there are dry spots.”
The dry weather comes at a time when a key feed ingredient has been rising in price, he added. The July corn contract on the Chicago Board of Trade closed just below US$3.80 a bushel on June 9. That’s up from late April and early May, when prices were closer to the US$3.70 mark.
“It’s a little bit of a surprise to see corn as high as it is,” he said.
Late last week the U.S. Department of Agriculture lowered its estimate of the total meat production expected in 2017. Analysts say it’s a reflection of falling cattle weights in recent months. However, there are ideas this forecast was expected and has already been priced into the market.