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Markets show heavy traffic on rising cattle prices

Drought hasn’t put as many yearlings on market as expected

Manitoba cattle auctions are gearing up for a busy fall run following a slow summer with feedlots coming off eight to 10 months of successive profits.

Feeder cattle prices were fully steady to a bit higher during the week ended Sept. 22 with more than 9,000 animals being sold at the province’s eight major auction yards.

Yearling steers saw good returns with some 800-pound animals bringing in prices near the $200-per-hundredweight mark.

Herb Lock of Farm$ense Marketing in Edmonton said the brighter financial picture at feedlots brings an overall sense of optimism to the marketplace, especially as it compares with the previous year when the fall run followed eight to 10 months of consecutive losses.

“This week, we expect to handle 100,000 calves (Western Canada-wide). It’s just exploded out of the gate,” he said, adding a good portion were for late-October or early-November delivery.

“The calf prices are up probably $25/cwt from a year ago. So there’s nothing wrong with that.”

Lock said he has seen few yearlings arrive at auction sooner than usual as some analysts predicted following extreme dry conditions in southern Alberta and Saskatchewan. Most of Manitoba and central and northern parts of the Prairies have enough moisture to keep pastures productive and provide ample feed, he said.

While Lock said some yearlings in the north moved early, most of those were sold in June and July for late-August/September delivery.

Yearling prices were sitting around $1.85-$2/lb., which is probably not too far off what producers paid for them last fall, he said.

“So they get to put on 500 lbs. at ($1.85 or $1.90). They’d think they’d died and gone to heaven.”

If there were price pressure points, he said, it would be on calves around 550 lbs., those destined for feedlots next spring. Some producers got burned with low returns on overwintered calves last spring, so they may be reluctant to wade in again.

On the upside, Lock said he has seen some light calves in the 400-lb. range sell for $2.50/lb.

“One of the front-and-centre issues is that our fed cattle here are operating somewhere in that three to five cents above the value they are landed in Nebraska.

“We’re floating a foot and a half off the water, enjoying the action,” Lock said.

Normally, western Canadian cattle sell for six to eight cents below the Nebraska landed value, he added.

South of the border, packers were low on slaughter-ready cattle last week, which caused prices to take a turn higher late in the week.

About the author

CNSC

Terry Fries writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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