Demand remains steady amid light cattle traffic

Activity was light at auction yards in Manitoba during the week ended Aug. 3, as markets continued to operate in full holiday mode, with many sale yards remaining closed until the fall.

Cam Dahl, general manager of Manitoba Beef Producers, said activity at auction marts in Manitoba probably won’t pick up again until the fall, when most yards across the province will be open again.

“A pickup in volume in the fall is just the usual production cycle,” he said. “Calves are maturing and are getting ready to go to sale.”

Volume during the week was on the lighter side because some farmers were busy harvesting their field crops, industry officials said.

Once again, only Winnipeg Livestock Sales and Heartland Livestock Services in Brandon were able to provide market reports for the week ended Aug. 3.

Winnipeg only had a total head count of 125, down from 252 last week. Brandon’s volume remained fairly steady with a total head count of 235, down from 254 the week prior.

Prices were steady to lower at both auction marts over the week on both the slaughter and feeder cattle markets.

Good demand for the time of year, despite low numbers making it hard to assemble full loads, also helped keep the market in Manitoba steady during the week, industry officials said.

However, there was some downward pressure put on prices by buyers who were lowering their bids to accommodate higher feed prices, officials said.

Feed prices in Canada have soared lately following a rally in U.S. feed prices. The upward price climb was sparked by drought conditions that put a lot of stress on crops in the U.S. Corn Belt.

The surging prices probably won’t affect Manitoba producers who run cow-calf operations right away because their cattle are generally out to pasture at this time of year, Dahl said, but added that those prices will affect the feeding sector.

“The feedlot sector, which buys calves and then sells them into the slaughter facilities, are definitely facing squeezed margins because the calf price is high, the supply of calves isn’t great and the feed prices are high,” he said.

The only foreseeable way livestock producers in the feed sector may be able to make a better profit is if Canada’s feed crop harvest results in a large supply, he said, but added it’s too early to tell whether that will happen or not.

High feed prices probably won’t influence when producers send their cattle to auction, but the situation will be different for each individual operation, Dahl said.

“I don’t think the high feed price is going to have a big impact on when cattle are going to come into market,” he said. “But calf prices are still pretty strong and that’s definitely an encouragement to bring cattle into market.” What prices will be when activity picks up again in the fall is hard to predict because there are many factors that could move the market to either side of unchanged, he said.

“Things are really volatile right now because of drought conditions in much of the U.S., and that’s going to have an impact on prices and how much feedlots can pay,” he said. “So there’s a lot of uncertainty.”

Dahl was sure farmers in Manitoba contracted some of their cattle during the week, because it is a good business practice. It’s a good idea for cattle farmers to forward contract in order to hedge their risk, he said.

About the author

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Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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