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Cattle prices see pressure as seasonal bump clears

Volumes should taper off heading toward year-end

Prices for Manitoba cattle softened slightly during the week ended Dec. 1, as the seasonal bump that helped push prices higher in early November evaporated. Around 12,400 head made their way into the province’s eight major auction outlets, compared to 14,350 the week before.

“Volume-wise we’re running about a half to two-thirds of what we were during the first two weeks of November,” said Rick Wright of Heartland Order Buyers.

Feeder cattle were steady to slightly lower while butcher cattle traded mostly steady. Plain cattle saw discounts.

Much of the downturn in price is due to simple supply and demand, Wright said.

“We had so many cattle coming at us during the first two weeks of November that transportation was under pressure and pen space was under pressure.”

In one week alone during that span, he said, Western Canada saw 194,000 cattle moved, which was a massive number.

Producers tend to have major payments that need to be made around that time, he said. From here until the end of the calendar year, he expects Manitoba auctions to see reduced numbers.

“But there is still a lot of demand for the feeder cattle, especially the cattle under 600 lbs.,” he said, adding that calves which have been weaned or are right off the cow also continue to be sold.

One problem is that feedlots are either full or booked right now. “Transportation is not as critical as it once was but pen space is certainly an issue right now,” Wright said.

Demand from Ontario and Quebec is very strong right now, which is keeping the market from turning lower, he said. It’s a good thing, too, as interest from the U.S. is extremely low.

A few feeder cattle are moving south of the border, Wright said, but most of them were contracted a long time ago or are being moved to feedlots in the U.S.

“The cost of feeding cattle is a little cheaper there than it was up here,” he said, adding most of the animals on the move are either yearling cattle or weaned calves.

U.S. futures on the Chicago Mercantile Exchange have softened as of late, which means further pressure is likely. Hedge funds are backing away while packers shop around for good deals.

Another issue ranchers are dealing with is the warm temperatures seen in Manitoba. Temperature fluctuations and humidity are stressing the calves, Wright said.

“We’d be better off if we were -10 C and steady all the time.”

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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