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Guelph beef plant’s shutdown alters feeder cattle traffic

Higher prices for feed grains put pressure on cattle markets

Guelph beef plant’s shutdown alters feeder cattle traffic

Livestock auction sites across the province saw a jump in activity with more cattle sold during the week ending Jan. 22. Prices for feeder cattle did not see much change from the previous week.

Despite this, deliveries are still slightly lower than at the same time last year — and higher grain prices are to blame, according to Rick Wright of Heartland Order Buying.

“The market is under pressure,” he added, noting high feed grain prices have led to increased cost of gain.

The temporary closure of the Cargill beef-packing plant at Guelph, Ont. from Dec. 17 to 29 due to a coronavirus outbreak is still affecting movement among feeder cattle in Western Canada. Severely reduced capacity at the plant, and backlogs in other plants in Eastern Canada and the U.S., have led to more cattle sold in Manitoba going to feedlots in the West.

“We have a backlog of fed cattle in Ontario. We have very poor prices in Ontario compared to the West,” Wright said. “We have some smaller feeders (in Ontario), which usually purchase cattle in Manitoba, considering not buying calves and selling their corn crop.”

Despite COVID-19-related shutdowns in Western Canada, he does not expect reduced pen capacity to be an issue.

“We’ve been working through our backlog of fed cattle due to the COVID shutdowns. (Packing plants) have done a good job of managing those and getting it down,” he said.

While the Canadian dollar has risen against the U.S. dollar in recent weeks, cattle exports are still going strong stateside, according to Wright. Recently, grass cattle weighing under 650 lbs. have seen significant activity as producers look to buy now, then sell in the fall.

“They’re hoping by that time we’ll have a good crop in the bin from this year and the grain prices will go down,” Wright said, adding that with high feed prices they’ll move the cattle to packing plants more quickly. As for large cattle, Wright added he expects prices to remain the same in the coming weeks.

“We’re expecting a forward pull on the cattle as the year goes on, which should create some openings at the end of this year and the beginning of next year, provided we get a good, decent crop this summer.”

About the author

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Adam Peleshaty – MarketsFarm

Adam Peleshaty writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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