Dry conditions support cattle auction traffic

Solid demand remains supportive for prices

Dry conditions support cattle auction traffic

Dry pastures and mounting concerns over feed availability going forward kept cattle moving through the auction yards still open in Manitoba during the first week of July.

Prices held relatively steady for most classes of feeder cattle, while large numbers put some pressure on the butcher trade in some cases.

“Usually we’d take every second week off in the summer, but this year we’ll stay open,” said Robin Hill of Heartland Livestock at Virden. His yard saw just under 500 head move through for its July 7 sale, with butcher cows accounting for the majority of the activity.

Good D1-D2 cows were trading around $85-$95 per hundredweight across the province, while feeder steers (sub-500 pounds) were generally in the $210-$225/cwt range.

Heat and dryness were hurting pasture conditions in many areas, leading to the increased movement for this time of year, Hill said. He expected “there will be producers who will be making some very tough decisions in the next few weeks.”

Drought and dry conditions cover a large part of Western Canada, as well as a large portion of neighbouring areas of the U.S. Pastures, hay and water levels are all impacting producers to varying degrees, market analyst Anne Wasko said.

“Depending on where producers are and their operation, they will be looking to limit the impact of the dryness,” she said, adding “it’s too early to make the call, but it’s on everyone’s mind.

“This is when (cattle) are supposed to be out on pasture, putting on weight, et cetera,” she said. An earlier-than-normal fall run was a safe expectation if the moisture stays away, she said, with grass yearling cattle already seeing earlier movement in the U.S.

From a pricing standpoint, demand remains strong, both domestically and on the export front, with the futures market pointing to solid prices into 2022, according to Wasko. “One of the biggest supporting factors to the strong demand… export demand continues to be exceptional.”

However, she added, costs are the big unknown.

“All eyes are also on feed costs,” said Wasko. The dryness will likely lead to another year of high feed grain prices, “but we don’t know what the final crop looks like yet.

“We still have to get through the summer doldrums of 2021.”

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Phil Franz-Warkentin - MarketsFarm

Phil Franz-Warkentin writes for MarketsFarm specializing in grain and commodity market reporting.

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