“Fairly aggressive” marketings trump strong loonie

Values for cattle sold at the various auction marts in Manitoba continued to hold strong levels during the week ended Feb. 24, as demand from all outlets remained fairly aggressive. Prices for cows also held their own during the reporting period.

Marketings of cattle, overall, remained at a pretty healthy pace, with favourable weather conditions helping to facilitate the movement.

Values for heavier-weight cattle, in particular, held steady at strong levels while prices for the butcher cattle were steady, if not a bit firmer.

“Marketings were fairly aggressive overall, with prices as good as, if not better,” said Buddy Bergner with the Ashern Auction Mart.

General firmness in the price trend applied to all types of animals, whether it was cows, bulls or feeders, he said.

The only factor that continued to work against the relative firm tone in the cattle market was the firmness experienced by the Canadian dollar, he said. The Canadian unit continued to trade above parity with the U.S. currency during the week.

Demand for cattle marketings, particularly slaughter animals, was also fairly brisk, Bergner said. There was a fair amount of interest from packers, who were looking to replenish animals as demand for hamburger from consumers continued to be strong, he said.

The fact that herds in Western Canada have been thinned out continues to factor into the firm prices being offered for these animals, Bergner said.

“Supplies of butcher cattle are definitely on the tight side, and that shortage is likely to continue providing support to the market.”

Some of the supply tightness has also been linked to the lack of individuals willing to background cattle in the fall for resale in the spring.

Private sources indicated most of the cattle that are backgrounded in the province are owned by outside interests, including from the U.S. as well as Eastern Canada.

In a traditional year, 40 to 45 per cent of the cattle sold in the spring are animals producers bought in the fall and backgrounded for sale in the spring.

Demand from both eastern and western packers within Canada was solid, while interest from the U.S. continued to be on the light side, Bergner said.

“Have to have”

Herb Lock of Farm Sense Marketing at Calgary confirmed that cows and bulls which would normally be available for slaughter are down significantly.

He pointed out that the amount of animals being retained to replenish herds was less than what was being marketed, based on activity at the various auction yards across Western Canada.

“The U.S. need for slaughter cattle was expected to grow, which was seen increasing the competition for the animals that are available at the auctions on the Prairies as well,” Lock said.

He speculated that cow values, which have already hit the 80-cents-a-pound range over the past year, will easily climb above 85 cents before the dust settles this spring. “The packers have to have those animals,” he said.

The other thing happening that can’t be ignored is that the U.S. cow herd is declining at a faster rate than in Western Canada, which will inevitably create more demand for the animals that are available no matter where they are located, he said.

“If the U.S. outlets buy 10,000 cows from Canada the impact on their market will be negligible if any at all, but in Canada that will definitely have an upward impact on values,” Lock said.

Feed supplies in the Ashern area continue to remain plentiful, but there were a few regions within the province where supplies were a bit tighter than would be preferred.

Meanwhile, the threat of higher fuel costs in the province means the cost of trucking the animals will soon be going up, Bergner felt.

“The companies that truck cattle will need to cover the jump in the cost of the fuel in the prices they charge,” he said. This in turn was seen reducing some of the value being received for the cattle.

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