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Values hold strong for replacement heifers, bulls

Cattle marketings in Manitoba during the week ended March 30 generally held the levels at which they’ve run over the past couple of weeks, though weather issues in certain parts of the province resulted in a slowdown in sales.

“With the frost out of the ground earlier than normal, the excess moisture made a few yards extremely wet and in turn difficult for producers to move cattle out,” said Keith Cleaver, manager of Heartland Livestock Services at Brandon.

The wet conditions made it difficult for trucks to manoeuvre on the yards as well. Road restrictions now implemented in Manitoba also were a factor, Cleaver said.

Values for heavier-weight cattle eased a bit while prices for replacement heifers, bulls and grass cattle held steady at strong levels. Slaughter cows and bulls also held value as packers continued to stock up in order to meet the consumer demand for hamburger.

“Feeder values definitely lost ground during the week with declines in live cattle futures at the CME (Chicago Mercantile Exchange) behind the weakness,” Cleaver said.

CME live cattle futures, after setting new highs early in March, moved to their lowest level since last June during the past week. Analysts linked the drop in U.S. cattle values to declining U.S. retail values as well as deeply negative beef packer margins in the U.S.

Uncertainty about the economy and a surge in gas prices have been factors behind the decline in U.S. consumer demand, analysts added.

Although U.S. and Canadian consumer preferences for beef remain strong, they may have changed. Consumer reaction to higher prices has already resulted in the rejection of higher-quality cuts and in turn a preference for the lower-cut meats, analysts said.

They noted beef demand is still sufficiently strong to support higher beef and cattle prices in 2012, but exactly how that demand will be manifest across different cuts and qualities of beef remains to be seen.

Deeply negative U.S. packer margins and sluggish demand for beef were causing U.S. processors to operate at reduced levels. Year‑to‑date cattle slaughter in the U.S. through last week was down five per cent from a year ago.

Meanwhile, the demand factor for Manitoba’s feeder cattle was described as consistent, with interest from both eastern and western outlets evident. The fluctuations in the value of the Canadian dollar during the week had little impact on the price of cattle.

Cleaver speculated the highs for feeder cattle may have been established, given the U.S. live cattle price outlook.

There were hopes that with the arrival of spring, U.S. consumer demand for beef would improve as the barbecue season heats up. That in turn was seen supporting CME live cattle values to some degree.

Buddy Bergner of Ashern Auction Mart said some of the strength seen in replacement cows and bulls, as well as grass cattle, was associated with the absence of numbers.

“The number of these type of animals being marketed continues to be on the lighter side, and that in turn has been helping prices,” he said.

The tight supply of cattle in the U.S., as well as in Canada, was expected to continue to keep a firm price floor under those animals, Bergner said.

Depending on the date and auction yard location, the Easter holiday weekend was seen causing a few yards to forgo their normal weekly sales. However, no official confirmation was available. Cattle producers were being advised to check with their local auction yards.

Just a reminder: the Manitoba-Saskatchewan auctioneer championships will be held on May 4 at the Heartland Livestock Services location at Virden.

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