Along with the stronger Canadian dollar, a few other factors have combined to point the Manitoba cattle industry toward something of a downturn, according to Harold Unrau of the Grunthal Livestock Auction Mart.
“Grain prices are rising. Cattle futures are staying the same or maybe dropping a bit. So between the dollar and the grain prices going up, and the futures dropping, everything is against the cattle at the moment,” he said.
The loonie has pushed over the 80 U.S.-cent mark and continued to rise during the week to the 82-cent mark, reaching highs unseen since 2017.
Feed grain prices have made sharp gains over the last 12 months, according to Prairie Ag Hotwire. Feed barley in Manitoba has jumped $1.76 per bushel delivered during that time, sitting at about $5.75/bu. The rise in feed wheat has been more pronounced, gaining $2.41 to reach $7.35-$8/bu. delivered.
“It really costs a lot more to feed cattle. If the cattle don’t go up with grain, then it comes out of the bottom line of the cattle,” Unrau said.
Cattle futures on the Chicago Mercantile Exchange (CME) have taken a hit over the last month. Over the course of the last month, prices have dropped US$10 from around US$125 per hundredweight.
Unrau said prices at Grunthal slipped back this week and noted producers were now hauling in more less desirable cattle, which added to declines in prices.
The lighter feed steers brought in $195-$214.50/cwt this week, compared to $195-$265 on April 27. As well, lighter feeder heifers garnered $165-$175/cwt this week, with only those in the 500- to 600-lb. category available for auction. Last week, the lighter heifers fetched $182-$208/cwt.
Along with the above factors, another has developed this year: dry conditions in much of the province. Unrau said southeastern Manitoba is not as dry as other areas, noting “we will be OK for a while.”
“There are some dry areas and they will see some cattle moving,” he said.
In other parts of the province, soil moisture levels were adequate to poor. Cool temperatures and dry conditions have slowed growth on pastures and in forage crops.