Feeder cattle moving through Manitoba auction marts continued to be met with strong demand during the week ended Jan. 20. The extremely aggressive feeder trade, which has boosted the cattle market, shows no signs of slowing down.
Some markets were seeing prices $2-$3 stronger on all classes of feeders. The biggest price increases were seen in lightweight cattle, especially cattle weighing less than 650 pounds that are suitable to go to grass in the summer. Grass-weight feeder calves were selling at least five cents higher per hundredweight at some auctions.
Rick Wright, a cattle buyer with Heartland Order Buying Co., said cattle weighing 650 to 800 lbs. were fully steady to strong, and a two per cent increase in price was seen in cattle that were over the 800-lb. mark.
“The weather wasn’t conducive to moving a lot of cattle this week, but we saw an increase in prices as well as a decrease in the feed market,” Wright said. U.S. corn values were down so domestic feed prices were also down.
Wright expects cattle volumes will increase by the week ended Jan. 27, and that the market won’t slow down anytime soon.
“I don’t think we have seen the high of the market on some of the classes of cattle yet,” Wright said. “There’s still some room for them to move.”
Demand was higher this week for all classes of animals with most of the demand coming from feedlots in Alberta and Ontario, although there was some local demand.
Slaughter cattle were selling slightly higher this week, with good demand. Wright said there was a slight increase in price for butchers, which added even more strength to the market.
Brutally cold temperatures across the province during the week ended Jan. 20, with wind chill warnings in the -40 C range in some areas, caused some auction marts across the province to cancel sales.
The cold itself had no impact on the market, but did influence the delivery of cattle, Wright said.
“The trucks are equipped to haul the cattle in the cold, but it’s more the human element that comes into play,” he said. “Do these producers want to go out when it’s that cold, take cattle out of the pens, put them on the trucks and bring them to the market?
“There’s a much better forecast for (the week ended Jan. 27), so some guys will look out and say, ‘You know, I have much better things to do than load my cattle today. The markets aren’t going down, so why would we need to work in this kind of environment?’”
However, producers who did bring their cattle to the sales this week were paid extremely well, he said.
“Those producers in Melita on Thursday were well paid for their cattle,” Wright said. “They had a very, very strong sale. Because buyers were trying to finish off some loads, they had good quality at the right time and there was quite a fight to (fill the trucks).”
Another factor this week that affected the delivery of cattle was Ag Days in Brandon. “Ag Days always takes a big chunk of guys away from that corner,” Wright said.
The U.S. is watching the Canadian cattle markets but the profitability isn’t where it should be yet, he said.
“The U.S. would love to buy some cattle, they’re certainly watching here,” he said. “Their market has had even bigger increases in percentage values than what ours has had in the last few weeks. They’re buying finished cattle, they’re buying slaughtered cows, and they are looking really hard at some of the classes of feeder cattle.
“But the cattle just don’t quite work yet to go that way,” Wright said. “For us it’s not a bad thing. We’re able to maintain a majority of these feeder cattle in Canada, which is good because it gives us synergies of feeding them, trucking them, processing them. Once they’re across the border we lose all those synergies.” Because supply is dictating demand, Wright said, prices have nowhere to go but up.
“All the fortune tellers’ predictions are starting to come true,” he said. “As long as we’re there to continue to export, and as long as our biggest customer, the U.S., can export, we’re going to see the numbers on the price side stay together. If you have cattle to sell you’re in the driver’s seat right now.”