Temperatures rise but prices cool at cattle auctions

Some Manitoba cattle may start heading east as volumes rise

Temperatures rise but prices cool at cattle auctions

As hot and dry weather continues to blister the Prairies including Manitoba, the volume of cattle sales has stayed consistent as more and more producers sell their animals.

“With the dry conditions, we are going to be getting busier. We are staying open through the summer to serve our customers,” said Robin Hill of Heartland Livestock Services at Virden.

With only four cattle auction sites – Virden, Brandon, Winnipeg and Grunthal – open during the week ending July 15, 1,835 cattle went through the rings. For the week ending July 8, 1,437 cattle were sold, with Brandon, Virden, Grunthal and Ashern open. Auction sites at Killarney, Gladstone and Ste. Rose are closed for the summer.

However, as the mercury goes up, prices for both feeders and butchers have gone down. The high bids for D1/D2 and D3-D5 cows for the week ending July 15 were $90.75 per hundredweight and $80/cwt, respectively, both lower than the previous week. Meanwhile, no feeder heifer exceeded $220/cwt and most feeder steers stayed below $230/cwt.

“This week, we saw the cows and bulls (sell for) lower. Probably $3 or $4 lower than last week. We also saw the butcher cattle trading three to five (dollars) lower than last week,” Hill said.

At the Chicago Mercantile Exchange on July 15, the August live cattle contract closed at US$121.125/cwt, while the August feeder cattle contract closed at US$157.375/cwt. Both bids were within a US$6 range of prices over the past month. However, the Canadian dollar has lost more than one U.S. cent since July 5, supporting cattle prices north of the border.

Hill posits that supply and demand is a major factor in prices.

“The supply of cows wouldn’t be this great at this time of year if it weren’t for the drought. There’s definitely more animals coming. What’s hurting the butcher trade, as much as anything right now, is volume,” he said, adding that the yearling trade looks to be strong.

Hill also mentioned that while most cattle are staying west for now, as volume increases, some may be sold to Eastern Canada.

Federal Agriculture Minister Marie-Claude Bibeau remotely met with her provincial and territorial counterparts on July 15 to discuss issues regarding the ag sector, including ongoing drought on the Prairies.

She suggested provinces could invoke the late-participation provision for AgriStability and urged Prairie governments to raise the AgriStability compensation rate to 80 per cent, providing farmers with an additional $75 million.

“I am working very closely with my provincial partners to monitor and respond to the evolving drought situation in the western parts of Ontario, the Prairies and British Columbia,” she said in a statement.

“My heart goes out to those farmers and ranchers feeling the impacts of the extreme heat wave and drought conditions. Our government is ready to assist and we will do what we can to make sure our programs are adequately responding to the crisis, including business risk management programs.

“I have committed to working closely with provinces to assess the need for activating flexibilities in our programs to respond to these extreme weather events.”

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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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