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Manitoba marts see fall cattle walk, not run

The middle of October might normally be the height of the fall run, but the numbers just aren’t there to the same extent as years’ past, according to participants. With fewer cattle making their way to market, prices in the feeder market have held up and even strengthened in some cases during the week ended October 19.

“I called all the classes of cattle up four to five cents (per pound) this week,” said Buddy Bergner of the Ashern Auction Mart. He said age-verified cows in particular saw some strength, while calves and yearlings also saw good demand.

However, it was more a function of supply, than demand, as far as the firm prices were concerned. “The numbers just aren’t there this year,” said Bergner.

However, were it not for the lack of numbers, “this market could be a lot worse off,” he said. The Ashern yard had just under 1,900 animals on offer at the Oct. 17 sale, but Bergner said this time of year would usually see 2,500 to 3,000 head at the weekly sales. Overall, he estimated that numbers for the fall run were down by about 6,600 cattle from the same time in 2011. The situation was similar at most other auction yards across the province.

Brandon did have over 3,000 head of cattle more through its yard, during the week, but most of that activity was a result of its pre-sort sale.

Of the animals that are moving, most of the calves are heading to the East, while yearlings are heading both west and east. Local buyers were also stepping forward to a larger extent, said Bergner.

“Many guys who used to have 250 cows, are now down to 150,” said Bergner, adding that many of the smaller producers have simply left completely.

“Cattle numbers are low across the globe, so the outlook for people who are raising calves is positive,” said Ryder Lee, manager of federal/provincial relations with the Canadian Cattlemen’s Association. He said the drought in the U.S. was cutting into profit margins for cattle feeders, as feed costs are higher than year-ago levels. “If barley is way up, they’ll pay less for calves,” he said. However, the inventory numbers are such that it is allowing for the market to grow.

Improving market access for Canadian beef internationally was also helping underpin domestic cattle values, said Lee. He was optimistic that expanded access to Japan and Europe would come about soon, while an increased appetite for beef from the growing middle class around the world was supportive for prices in general.

However, closer to home the ongoing uncertainty at the XL p lant in Alberta was leading to some uncertainty in the Manitoba cattle markets as well. The plant remained closed due to E. coli issues during the week, but could be back running in the near future if a takeover plan announced during the week goes through.

“The effects of XL have really been on cows so far, but on calves and yearlings producers are still getting paid for quality,” said Lee. If the plant remains closed, the lack of that major cattle processor would be negative for the feeder sector as well.

Lee said many plants that have gone through similar situations in the past were shut down completely, so anything that could get it running again would be beneficial overall. “There are other packers that could take those cattle, but it would be at a discount,” said Lee.

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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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