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Domestic demand supports feeder cattle prices

The large volume of cattle moving through Manitoba’s auction yards during the week ended Feb. 1 were met with fairly good demand, as prices were generally steady to firmer compared to the previous week when numbers were much smaller.

“The market was showing a little bit of strength,” said Buddy Bergner of Ashern Auction Mart. Most of the demand for the feeders was coming from Canadian feedyards to the west and the east, he said.

The softer Canadian dollar also brought up some buying interest for the butcher animals from the U.S. — but a lack of feed in the U.S. kept any feeders from moving south.

At the Ashern yard, top-quality feeder steers improved by a few dollars from the previous week, while the plainer animals and heifers held steady. Cows and bulls were also steady on the week.

Bergner said feed supplies are also getting very tight in Manitoba — and what feed there is, is very high priced.

The lack of feed supplies would make it tough for some producers to make it through the winter, with many people scrambling to bring in supplies while they can. “The cattle market isn’t bad, but the price of everything else is so high,” said Bergner.

The feedlots bringing in the animals these days likely contracted a fair bit of grain earlier in the year, so they are not hurting to the same extent with rising feed costs, said Bergner. “The income just isn’t coming in,” he added.

The high cost of gain means cow-calf producers are better off selling their animals now, rather than waiting for them to put on more weight, as there are no extra profits to be had in feeding the cattle themselves, said Bergner. “They’ve already been feeding them for free since December.”

Calving season will start up in March, and bred cows have been moving through the yards for the past two weeks. “They’re not bringing much more than market price,” said Bergner, adding that the lack of feed was also a problem there.

A hay shortage in the Interlake meant some producers were being forced to ship bales in from 100 miles away, said Bergner, who added that “the freight is just killing them.”

High feed prices are causing some cattle producers to start looking at their land in a different light, with many producers taking cattle land and turning it into grain land, said Bergner.

At current grain prices it makes sense, “but if we ever get a bumper crop, who will use all of this grain?” he asked.

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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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