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Attractive premium for age-verified cows

The fall run was in full swing across Manitoba’s cattle auction yards during the week ended November 2, with prices still holding firm and even looking a little better in some cases. Volumes were big at most auctions, with Heartland Livestock Services in Virden seeing the most action on their Halloween Day sale.

“The feeder trade was fully steady to $2 (per hundredweight) higher in spots,” said Robin Hill, of Heartland Livestock Services in Virden. He described activity as “very aggressive,” with many order buyers in the market. Premiums for the higher-quality animals also remained in place.

“The orders are taking the big volume today,” said Hill. The demand from eastern feedlots was particularly strong, with those customers accounting for about 30 per cent of the business in the province. Roughly 40 per cent to 50 per cent of the animals are moving west, with the remainder staying local.

“We’re seeing good local demand on the lighter cattle,” said Hill, noting that smaller Manitoba feedlots were starting to bring in more cattle. U.S. buyers, looking to feed the animals in Canada, were also showing some demand as the softer Canadian dollar helped encourage buying interest on that front.

The continued strength in the feeder market comes despite the ongoing bearish issues overhanging the cattle sector, such as high feed costs and the fallout from the closure of XL Foods. “It’s better than everyone expected,” said Hill on the current state of the feeder market. He said the declining herd sizes across North America were behind some of the firmness in the market.

Yearlings are pretty much done moving for the year, with calves accounting for most of the feeder animals moving now. Hill said the calf run had about three more weeks to go before quieting down for the winter.

On the slaughter side, bulls saw a jump of about $2 to $3 per hundredweight during the week. Trade on the cows was a little steadier, with that market already jumping higher a couple of weeks ago.

“We’re definitely seeing quite a premium on age-verified cows,” said Hill. With age-verified animals bringing in up to nine cents per pound more, Hill said farmers would do well to age verify as many cattle as they can as that nine cents translates out to an additional $75 to $100 in their pocket per animal.

“If you can age verify the cows, we have a whole bunch of homes for the cows,” said Hill, “while if you can’t age verify, we have only one in Canada right now – High River.”

From a numbers perspective, Hill said about 200 to 225 butcher cows and bulls have been moving through the Virden yard on a weekly basis. That’s about 100 head less than usual for this time of year. He said those numbers would likely pick up over the next few weeks, with bred cow sales also increasing at this time of year.

In other news, the Manitoba Beef Producers association will hold meetings across the province through the first half of November to discuss issues in the cattle sector. XL Foods, community pastures, dealer defaults, traceability, predators, Growing Forward II, and bovine TB, among other topics, are on the agenda. New directors will also be elected in the odd-numbered districts.

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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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