Plummeting live cattle futures put pressure on local heavyweight cattle prices at Manitoba’s cattle auctions during the week ended March 6.
Allan Munroe of Killarney Auction Mart noted “a large price slide” between 600- and 800-lb. cattle, as prices for lighter cattle remain strong.
Last week, 700- to 800-lb. feeder cattle were priced between $180 and $202 per hundredweight at Killarney’s auction. However, due to turmoil in financial markets stoked by COVID-19 coronavirus concerns, cattle futures in nearby months “fell from the sky,” according to Munroe. In mid-February, June live cattle futures were around US$110 per hundredweight. Prices fell by about US$7 the following week, and have since levelled off.
Subsequently, prices for 700- to 800-lb. cattle were lower this week, between $175 and $190 per hundredweight.
Prices for lighter cattle are insulated from volatility, Munroe said, due to hopes that financial markets will improve by the time they’re ready to be processed.
“With the big ones, there’s not as much time,” he said.
This week, prices for cattle between 400 and 500 lbs. were between $230 and $255 — steady when compared to the previous week’s prices.
“Luckily, we’ve seen some rebound in the stock market and futures, compared to the wreck we saw last week,” Munroe commented.
The U.S. Federal Reserve on March 3 cut interest rates by half of a percentage point, to mitigate concerns of a global economic slowdown. The Bank of Canada followed suit on March 4.