Demand fluctuations put pressure on cattle prices

A lower loonie could insulate local prices against declines in U.S. futures

Prices at Manitoba’s cattle auctions were slightly lower during the week ended March 20, driven largely by fluctuations in demand.

Tara Fulton, manager of Gladstone Livestock Auction Mart, noted prices for heavier cattle over 750 lbs. have been under pressure for the past three weeks.

“Demand for lighter-weight animals has been strong all along, because of that grass market,” she said.

This week, prices for 800- to 900-lb. cattle were between $120 and $149.50 per hundredweight. Last week, the same weight class was between $120 and $160 per hundredweight.

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“It varied from weight category to weight category, but basically, we’re looking at 10 to 20 cents lower in most weight categories,” she said.

At mid-week, the U.S. and Canada announced a joint effort to close their shared border to non-essential travel in an attempt to quell the rapidly spreading COVID-19 coronavirus. In a press conference Thursday, Prime Minister Justin Trudeau said the closure “will not disrupt the flow of supply chains” between the two countries.

“They said the border closing won’t affect commerce, but you know how that works,” Fulton said. “It seems that anything can affect the prices.”

Nearby contracts for U.S. cattle futures have fallen by about US$10 over the past week, landing around US$95 per hundredweight.

Although U.S. futures impact Canadian prices, significant weakness in the Canadian dollar on the week is likely to provide some support to prices for the foreseeable future. The Canadian dollar was around 70 U.S. cents on the week, hovering around its lowest point in several years.

In order to lessen the spread of COVID-19, social distancing policies are in place at many auctions across the province. The Gladstone market is only open to producers selling cattle, and Grunthal Livestock Auction Mart is only allowing buyers, sellers and staff to attend auctions.

About the author

Glacier MarketsFarm

Marlo Glass

Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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