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Fed cattle markets are expected to show strength

Manitoba’s major auction markets closed for the week

It was a slow start to the new year for Manitoba auction marts, as major outlets stayed quiet during the week ended Jan. 5. However, it may have been a good time for participants to stay home, due to the cold weather.

Feed usage is likely on the minds of some ranchers, though, as they wonder whether they will need additional supplies to get their animals through the winter if it stays cold.

“I wouldn’t suggest a feed shortage per se, but certainly the consumption will be up,” said Anne Wasko of Gateway Livestock Marketing.

Cattle tend to put on fewer pounds during the last few days of finishing when it’s cold, she noted. It’s an issue that may be felt more acutely this year, too, as forage growth was curtailed in certain parts of the Prairies due to the weather.

Wasko expects the fed cattle market to show strength in January.

“Cattle feeders will be standing their ground pretty stoutly given the cold snap and the slowdown in weight gain on the cattle will slow everything down a wee bit,” she said.

Shortly before Christmas, Wasko noticed a $5-$7 jump in most classes, so she’s hoping that will continue.

“My guess is, though, as we get into 2018, through the first quarter, we’re going to find marketing not as urgent as we saw in the first quarter of 2017,” she said.

Packers are helping keep prices supported though as they scour the market for more inventory.

That sector of the cattle industry is definitely showing profitability, which should keep the market elevated, Wasko said.

“The packers have definitely been a driver for the fed cattle,” she said.

One thing that would bolster the market in 2018, she noted, would be if both the domestic and export markets saw the same level of demand as 2017.

At the same time, she said, higher volumes could make that difficult to achieve.

“We know there’s going to be more beef around in North America, that’s a given — more cattle going on feed.”

In the near term, cattle prices could face pressure this week after a sell-off in the U.S. on Jan. 5. Packers surprised sellers by offering lighter bids for slaughter-ready animals, which put pressure on dressed sales as well.

Editor’s Note: Our weekly table of auction market activity will return when sales resume.

About the author

Columnist

Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Dave has a deep background in the radio industry and is a graduate of the University of Winnipeg. He lives in Winnipeg with his wife and two beautiful children. His hobbies include reading, podcasting and following the Atlanta Braves.

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