Cattle Markets: Feeder prices seen staying strong going into fall

U.S. buyers have the lower loonie on their side

Cattle sale volume across Manitoba was still relatively low during the week ended Aug. 23, but auctions at Ashern, Gladstone and Ste. Rose resumed after being closed for most of July and August.

According to Rick Wright, buyer with Heartland Buying Order Co., favourable pasture land conditions in Manitoba were keeping yearlings off the market.

“We did see some yearlings off the grass start to move, but overall numbers were still shy this week due to the good pasture conditions,” he said. “Besides the odd region where they’re experiencing some drier weather, in general, the pastures look quite good for this time of the year.”

Manitoba Agriculture, Food and Rural Initiatives’ Aug. 19 crop report had pasture land rated fair to good throughout the province. However, the report said some land was beginning to decline in quality due to overgrazing.

As volume picks up in the next few weeks, Wright said he expects prices for all classes of feeder cattle to stay relatively stable heading into the fall.

“I think we’ll see the calf market be very aggressive this fall, and the yearlings will pretty much be all gone in a month’s time, so I think prices there will be strong,” he said.

“A few smaller feedlots that have not purchased inventory will be on the cash market trying to buy yearlings. I expect the market this fall to be very favourable for all classes.”

Looking at butcher cattle, Wright said they are selling well, but prices could decline when larger numbers reach the market.

“We can probably expect a slight decline in butcher cattle prices when we get into October, because there will be larger numbers of cows available and we’re past the grilling season in the south,” he said. “It won’t be a significant drop, but it won’t be as peppy as it’s been all summer.”

The coming harvest hasn’t begun weighing on cattle prices, but with some new-crop grain going into bins already, it’s only a matter of time, Wright said.

“Crop projections look good, yields look good, and we’re starting to see harvest begin already,” he said. “We are starting to get some new crop in the bin, and it’s quite a bit cheaper than what the old crop was selling for, so that’s going to make it a little more buyer friendly.”

Interest continues to remain strong, with more buyers in Ontario and Quebec buying cattle in recent weeks, Wright said. However, with the Canadian dollar declining in value against the U.S. dollar, buyers in Canada will have to outbid U.S. buyers.

“The Americans are very interested in purchasing cattle out of Manitoba, but right now, even with the weaker Canadian dollar, it’s not quite weak enough to have them dominate the market,” Wright said. “They’re still getting lots of competition from Alberta and we’re starting to see more interest coming out of Ontario and Quebec for cattle in the fall too.”

At the close on Aug. 23, the Canadian dollar was worth US95.23 cents.

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