Scott Anderson, field representative for Winnipeg Livestock Sales, suggested that those buying yearlings were more likely to follow declining cattle futures than those who were buying calves. He also said the yearling market has tailed off due to a lack of quality, increasing demand for calves.

“I know calves kind of dropped off a little bit during the period when we had poor weather with snow, slush and mud and everything. But now, the ground is starting to freeze up. The local guys are actually coming back on the market, trying to gather up a few calves before things run out.”

Over the past week, live and feeder cattle prices on the Chicago Mercantile Exchange were in a sideways pattern. The February live cattle contract closed Nov. 22 at US$175.275/cwt., just five U.S. cents lower than on Nov. 16. There was no trading on Nov. 23 due to Thanksgiving Day south of the border.

Meanwhile, the January feeder cattle contract ended Nov. 22 at US$227.125/cwt., 37.5 U.S. cents less than six days earlier.

Across Manitoba, heifer prices were higher at most auction sites, shrinking steer/heifer price spreads.

“The lighter heifer calves are trading very strong. There’s always the large gap between steers and heifers and it seems like some of the prices were a little bit narrower. Local guys are buying heifers, so that certainly helped,” Anderson added.

As temperatures drop, he advised cattle producers to not let calves get “stale.”

“Don’t sell short-weaned cattle, because typically they’re going to need some TLC.

“Guys that are taking in any kind of volume certainly don’t want to have to treat calves the minute they get off the truck. They want calves that are arriving with bounce in their step. They don’t want anything with droopy ears or runny noses. Those cattle are getting discounted substantially.”

Most lightweight calves are staying local, while mid to heavyweight calves are being sent to Ontario, according to Anderson. He said if the futures find balance, there will be more confidence in the markets.

“If (the futures) continue to drop US$3 to US$4 a week, that will certainly pull some of the rug out from underneath feeder cattle prices,” he said.

“As we get closer to Christmas, the numbers at the sale will be smaller and smaller … guys that have to spend money in order to avoid paying taxes on cattle they’ve sold, that could also put some higher demand into the market.”

On Nov. 21, Rabobank released its Global Beef Quarterly Report, which showed Canadian cattle prices rising three per cent from June to October, while U.S. prices were steady. Australia and Brazil are expected to increase beef production, while the U.S. and Europe will see declines.

As a result, worldwide beef production is expected to be down one per cent in 2023 compared to the previous year.

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Most sales saw declines in both volume and price. At Gladstone Auction Mart’s regular sale on Nov. 14, most prices for heavyweight and lightweight cattle were down compared to one week earlier. As for D1 and D2 slaughter cows, the minimum price was $8 per hundredweight lower, while the price for mature bulls was down $5/cwt. on the lower end.

Tyler Slawinski, auctioneer at Ashern and Gladstone auction marts, said cattle weighing 600 pounds or more were pressured most, partly due to lower United States futures prices.

“Heavier feeder cattle, based on the futures, going outwards where those cattle finish were definitely under pressure,” Slawinski said. However, greater demand supported the heifer market.

“Grass-type (cattle) weighing 600 (lb.) or lower were steady to stronger in spots,” he said. “More guys are starting to come on board buying heifers and it was supporting that market going forward.”

After cattle prices on the Chicago Mercantile Exchange took a large drop on Nov. 9 and reached a nine-month low the next day, they were in recovery mode for most of the week until another price drop on Nov. 16.

All in all, the February live cattle contract gained 85 U.S. cents over the week to US$175.325/cwt. on Nov. 16, after hitting a week-long high of $179.050/cwt. the previous day. The January feeder cattle contract closed at $227.500/cwt. on Nov. 16, a weekly gain of $2.575.

Mild weather during the week caused adverse pen conditions for backgrounding and weaning cattle, according to Slawinski. Different situations in both Western and Eastern Canada have created new obstacles.

“We have a lot of feedlots in the west that don’t have any room for cattle right now, which is also bearish on the market,” he said.

“Ontario is way behind in their harvest and fat cattle are still backed up in the feeder farms there. Once they can get some of the fat cattle out of the way (with) those barns cleaned out and emptied, I think we’re going to see a lot of relief on pressure.”

However, an opportunity presented itself for local producers.

“We’re starting to see a lot of these local orders, guys that are going to feed a few (cattle) locally. They’re starting to buy now and finally get things ready to go…

“I’m not sure what’s going to be available for grass after the New Year. I think a lot of the first-cut cattle have probably went to town and been marketed already. There’s definitely going to be a lot less cattle backgrounding this year than normal.”

Slawinski added that as supply dwindles, cattle prices should rise heading into 2024.

“I think we could see prices return to where they were prior to when the pressure started being put on the market,” he said.

“Anybody who hasn’t bought grass cattle and are looking for grass cattle, they’re going to have to pay for them, for sure.”

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The variation in the price structure was due to the adverse weather. Major feedlot operators were more aggressive on longer-term weaned calves with processing records. Fleshier unweaned calves traded slightly below week-ago levels but there was limited slippage. Manitoba and eastern Saskatchewan markets appeared to reflect a premium over major Alberta auctions. Once again there was very strong demand from Ontario and these orders gave the crowd a shot of adrenalin. One buyer commented that when certain packages made fresh highs, a scarcity fear seemed to cloud over the room, resulting in a firmer tone on the next run. There was no scrutiny on the price structure as “just get’ em”-type orders were evident, especially on some peewee calves.

Southeast of Calgary, medium- to larger-frame red mixed steers with some butter covering weighing 930 lbs. apparently sold for $288. In the same region, larger-frame lower-flesh Angus-based yearling steers coming off grass and hay diet weighing 822 lbs. were valued at $322. In central Saskatchewan, Simmental-based steers with medium flesh weighing 875 lbs. were reported to have traded for $300.

At Lloydminster, red weaned steers on the card at 749 lbs. apparently traded for $343. Northwest of Winnipeg, Charolais-based steers weighing 772 lbs. dropped the gavel at $339 and Charolais heifers weighing 676 lbs. silenced the crowed at $310.

In Ponoka, red Limousin steers off cows and grass with full processing data averaging 630 lbs. notched the board at $361. At the same sale, black Angus-based semi-weaned heifers weighing 661 lbs. off cows grass and hay sold for $300. In central Saskatchewan, tan steers appearing to be short weaned off their mothers weighing 605 lbs. traded for $371.

South of Edmonton, black mixed steers weighing 565 lbs. coming off a diet of cows and silage with full health records were purchased for $376. In Manitoba, Angus-based steers weighing a shade over 500 lbs. were reported to have sold for $415 and Charolais heifers on the card at 566 pounds were last bid at $336. In central Saskatchewan, Simmental-based steers weighing 450 lbs. reportedly traded for $443 and their younger brothers in a group averaging 400 lbs. set the chart at $493.

Alberta packers were buying fed cattle on a dressed basis at $390/cwt delivered, unchanged from last week. The Alberta fed cattle basis over the winter could deteriorate similar to last year causing margins to move into negative territory. For March, the break-even pen closeout value is around $265/cwt. On Friday, the best one can hope for, given the April live cattle futures, was $250/cwt.

— Jerry Klassen is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339 or via his website at ResilCapital.com.

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All but two sites surpassed 1,000 cattle through the rings at their respective sales for a total of 12,444, while all sites except Grunthal Livestock Auction Mart sold a feeder steer for more than $500 per hundredweight.

The highest price was found at Ashern Auction Mart at its Oct. 11 sale with 330-lb. Charolais steers selling at $595/cwt. General manager Kirk Kiesman said the calf market is at the highest prices he has ever seen.

“2015 would have had strong prices, but the prices this year are better than that,” he said. “Farmers deserve it after all the struggle they have had over the last couple of years. It’s good to see farmers getting rewarded for all the hard work they’ve been doing.

“People are optimistic that prices are going to stay strong and in a competitive market, there are not a lot of cattle out there. So if you want something good, then you’re going to have to pay for it.”

While prices for feeder steers continue to rise, prices for some feeder heifers and slaughter cattle are beginning to soften. D1 and D2 cows ranged in price from $110 to $157/cwt., compared to $115-$160 the week before. D3 to D5 cows cost between $90 and $125/cwt., lower than the range of $100-$128/cwt. one week earlier.

Kiesman said the end of the season is near for many yearlings as they make way for the upcoming calf run.

“Guys at feedlots are starting to switch from yearlings to feeder cattle now for calves off the cow,” he said. “The yearlings are almost done trading for the year.”

On the Chicago Mercantile Exchange, the December live cattle contract closed at US$187.80/cwt. on Oct. 12, a gain of $2.425 from the week before. This came after a $1.975/cwt. rally on Oct. 11. The November feeder cattle contract closed at $253.575/cwt. on Oct. 12, $3.275 higher than the previous week’s close.

While demand is still strong from Ontario, Kiesman said, cattle are also being sold to Alberta, Saskatchewan and the United States. When the calf run starts, he expects prices to remain strong but he’s leaving open the possibility for some declines.

“I think the prices are going to stay strong, but if there’s anything that might drop prices, it will be a labour and trucking shortage and issues with transportation. Right now, it looks like it will be the main thing that will draw back on prices,” he said.

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In the case of Killarney Auction Mart, prices for feeder heifers and slaughter cattle were little changed at its regular sale on Oct. 2. Heavyweight steer prices were higher and those for lighter steers were lower.

Sellers were still welcoming high prices, according to Killarney Auction Mart general manager Allan Munroe.

“People are genuinely happy when they’re leaving with their cheque,” he said. “Selling always goes a little bit up and down. We’re starting to get a little bit of seasonal pressure on some cows, which we always see at this time of year.”

Prices for slaughter cattle weren’t as high as they’ve been over the past few weeks, he added. Overall, the Oct. 2 sale in Killarney saw 952 cattle go through the rings, compared to 1,214 on Sept. 25.

“We saw a lot of light calves that maybe wouldn’t be coming to market until later on. The numbers are up for most places at this time of year.

“If we get some moisture this week, it’s looking greener than it did most of summer. But a lot of pastures are getting done up and there’s not a big surplus of feed around. So we’re seeing some guys moving a little bit earlier,” Munroe said.

On the Chicago Mercantile Exchange Oct. 5, the December live cattle contract lost US$5.05 per hundredweight from the week before to close at $185.375 after going down to $184.60/cwt. on the same day, its lowest price since Sept. 6.

The November feeder cattle contract dropped $7.375/cwt. from one week earlier to close at $250.30. On Oct. 3, the contract fell below the $250/cwt. mark for the first time since Aug. 18.

Ontario is showing “aggressive” interest in higher-priced cattle, said Munroe, and some yearlings are also going to the United States.

High prices are overshadowing other issues within the industry, including a feed shortage in western Saskatchewan and southern Alberta, as well as the aging base of cattle producers in Western Canada, he added.

“Demographically, a lot of our cattle farmers are getting older. When we’re seeing this much optimism in our industry, some are seeing it as a time to cash out,” Munroe said.

Continued support

Manitoba Beef Producers released a statement congratulating the New Democratic Party and premier-designate Wab Kinew on the provincial election victory on Oct. 3.

“Moving forward, MBP intends to engage with the new government on an array of topics affecting Manitoba’s beef industry such as improvements to business risk management (BRM) programs to ensure beef producers are on a level playing field with other sectors, agricultural Crown lands, water management, recognition for ecosystem services provided through beef production, infrastructure, trade, labour supply and more,” the statement said.

MBP also thanked exiting Premier and Progressive Conservative leader Heather Stefanson, as well as former Agriculture Minister Derek Johnson for their assistance to Manitoba’s beef industry.

“These included the provision of AgriRecovery during the 2021 drought, continued support for business risk programs and beneficial management programs through the various agricultural policy frameworks, funding toward the Livestock Predation Prevention Project, the funding additional of training seats for Manitoba veterinary students, and support for agriculture-related environmental initiatives through the Conservation Trust, among others,” the statement said.

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“It’s very busy,” said Tyler Slawinski, auctioneer for Gladstone as well as the Ashern Auction Mart. “We’ve never seen that many cattle in Gladstone at this time of year.”

The Gladstone auction had 1,220 feeders and slaughter cattle pass through its rings on Sept. 26, easily exceeding the 995 from the previous week.

Slawinski noted some prices eased back a little during this week, as futures values on the Chicago Mercantile Exchange dipped. However, he lamented some of the ill effects the exorbitant prices have created.

“In my opinion, it’s these prices that are sucking the cattle out early. There are a lot of calves being marketed for these huge prices…that maybe should not be marketed yet. These 200- and 300-pound calves should probably be with their cows a little longer,” he explained.

It’s one thing, he said, to include a few such calves when there are only a handful of them left over.

“What I mean, is when guys are shipping these really small calves, they’re getting lucky marketing them now because the weather has been decent. But if the weather was very poor, the price would definitely reflect, because they take so much pampering and looking after,” he continued.

“They always were high-risk, but they’re more high-risk now because they cost so much money, and you’re just getting a small calf,” Slawinski added, stressing he does not fault the producer for wanting the high prices being offered for small calves.

“Who wouldn’t want to sell a calf for $5 a pound and frame that cheque? They may never see it again. If we get to $6, we don’t know where this thing is at,” he said, noting the cattle market is in “uncharted waters,” and called for greater co-operation with the industry.

“I think I speak for all of the Canadian cattlemen, it would be nice if this thing just maintained some consistency for a decent period of time, to find some stability. Somewhere the producers, the packers, the feedlots and the backgrounders can all find some harmony. That everybody can make a buck, and everybody can win, rather one person gaining and the rest losing.”

Gladstone has also been seeing fresh buyers showing up lately, he said. That has worked out so far as Gladstone recently completed its expansion, which included additional pens and facilities for improved video sales. He said Gladstone will host an open house on Oct. 6 to highlight its expansion.

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Heartland Livestock Services at Brandon and Virden, which conducted sales throughout the summer, on Aug. 29 and 30 put 1,721 cattle through the rings, 400 fewer than the previous week.

As the fall run approaches, rising summer prices showed no signs of slowing.

“(There were) record-setting prices this week,” said Brennin Jack, general manager at Brandon and Virden. “The lower Canadian dollar (and) feed costs getting a bit cheaper — they just made for added fuel to the fire. It was absolutely electric this week.”

Steers weighing less than 600 pounds sold for as much as $445 per hundredweight during the week. By comparison, the highest selling price for a steer in the same category the previous week at HLS was $398/cwt. The maximum selling price for a steer weighing less than 400 lb. was $472/cwt. at Gladstone Auction Mart. One heifer at HLS sold for $345/cwt., edging out last week’s maximum price for heifers by $1.

There wasn’t much change in butcher cattle prices. The highest price for a D1 or D2 cow for the week ended Aug. 31 was $173/cwt. at Winnipeg Livestock Sales, $3 more than the highest price in the previous week. Gladstone had the highest price for a mature bull at $188.25/cwt., 75 cents lower than the previous week’s high.

“It seems like there is great demand for all types of cattle right now. (Demand for) yearlings, especially, is extremely high. The demand from Ontario, the U.S. and southern Alberta (was also high),” Jack said, adding that 50 per cent of the cattle went to Alberta, one-third went to Ontario and one-fifth went stateside.

Southwestern Manitoba saw rain during the week, but pasture conditions seemed “below-normal,” Jack added.

On the Chicago Mercantile Exchange, the October live cattle contract closed at US$180.825/cwt. on Aug. 31, just 10 U.S. cents higher than one week earlier. The October feeder cattle contract closed at $256.025/cwt., $2.775 higher than the week before. The contract hit an all-time high of $257.925 on Aug. 28.

Jack believes prices will eventually come down but due to the high number of pre-sold calves this summer, “the biggest factor this fall will be the availability of trucks in mid-October.”

The pre-sales “are all going to be delivered from Oct. 15 to Nov. 15. It’s just going to be a fight for trucks and that’s what going to dictate the market… If you’ve got cattle to market, you’ve got to get them to the biggest sales because that’s where the trucks are going to go.”

Manitoba Beef Producers has announced the dates of its in-person fall district meetings, as well as a virtual meeting for producers from all districts on Nov. 7.

The in-person meetings for even-numbered districts, which will include elections, start on Oct. 18 and run through Nov. 2. For more information, visit: mbbeef.ca/our-news/mbp-fall-district-meetings/.

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Gladstone Auction Mart and Ashern Auction Mart were back in business this week, with small numbers of cattle coming in, according to one of their auctioneers, Tyler Slawinski. Most of those cattle were for the slaughter market. Gladstone handled 135 cattle and Ashern had 208 pass through its rings.

“There were a handful of feeders at both sales, but really nothing a person could quote,” Slawinski said, adding the start of the annual fall run is weather-dependent.

“If we see an early frost, then if things are dry leading to that frost, then things will be sooner than later. When we get to the end of September it will ramp up pretty quick.”

Some auctions had far more cattle, including Ste. Rose Auction Mart with 2,329 and Heartland Livestock Services’ Virden auction handling 2,055.

Although the large influx of cattle has yet to start at Gladstone or Ashern, Slawinski indicated more yearlings and slaughter cattle are likely to come in during the week of Aug. 25-31.

Pastures across Manitoba are spotty from location to location, Slawinski said.

“Some were blessed with timely rains and others were not. That’s the way the rains have been trending the last couple of years. You might be a mile away from the rain or you might be in it.

“We haven’t seen a real general provincial rain in quite some time. We did have a fairly decent one in May, but after that it was quite spotty.”

Statistics Canada issued its semi-annual report on domestic cattle inventory Aug. 23. Countrywide there were 12.16 million dairy and beef cattle on all operations as of July 31. That continued the downward trend seen in Canada’s cattle industry, and it’s the least number of cattle in the country for July 1 since 12.15 million in 1988.

As for Manitoba, total cattle slipped to one million, which marked the sixth straight year that number has declined. That’s a far cry from the province’s all-time high of 1.735 million head for July 1 in 2005. The population has been in steady decline except for a few bumps upward along the way.

The current number is the second fewest in the province, easing under 1.006 million in 1969. Manitoba hasn’t had less than one million cattle midway through a year since there were 982,000 in 1962, according to StatCan.

The reduced number has driven slaughter and feeder prices to record levels in several cases, but to Slawinski, the steady decline doesn’t bode well for the cattle industry on the Prairies.

“There’s going to be a pile more producers hanging their hats up now that the prices are really good. Some guys are sitting on the fence, toying with the idea for quite a while, and with the promising prices, I think you’re going to see a lot of them cash in their chips,” he said.

Added to that, high interest rates and inflation have made it more difficult for anyone wanting to enter the cattle industry, he said.

Slawinski called on financial institutions to step in to help such producers.

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Given the current market conditions, it makes economic sense to start getting the yearlings off the ground and into market already, according to Rick Wright, cattle buyer and executive administrator of the Livestock Markets Association of Canada.

However, he added that it made sense to hold onto lighter calves as long as possible to put on weight and get higher returns.

“The more pounds you put on a calve this year the better,” said Wright, noting that while pasture conditions were varied around the province, producers would likely be looking to graze stubble or cover crops where possible.

Heavier-weight feeder steers above 900 pounds were bringing in $220 to $255 per hundredweight, while the lightweight calves under 500lbs were priced around the $350/cwt area. Yearling heifers over 800lbs were also solid, with prices well above $200/cwt, with higher quality lighter heifer calves easily topping $300/cwt.

Cull cow pricing was also solid in the $125 to $140/cwt range for what was moving during the week ended Aug. 17.

Demand for Manitoba feeder cattle was coming from all sides, according to Wright. “Manitoba has the best of both worlds,” said Wright, noting that demand was coming from feedlots in both Alberta and Ontario, with some demand from the United States also evident.

“We are very confident that you’ll have a very good fall if you’re a seller,” said Wright, adding that the buyers were likely less excited about the market given the rising interest rates, carrying costs, and relatively high feed prices.

“For the cow/calf guys, for once in the last number of years they’re the ones in the drivers’ seat and will realize some good returns,” said Wright.

However, the lack of transportation remains an issue, and could become more prevalent when the numbers pick up in the fall.

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Brenna Grant, executive director of Canfax, the marketing analysis division of the Canadian Cattle Association, said they should expect more of the same.

“Forward delivery sales in July, for September, October and November delivery, had prices at $372-$382 per hundredweight for five-weight steers,” she said.

“Forward delivery prices tend to the top of the market, so while prices are expected to remain strong into the fall run, there will be a range depending on where feed grain prices go.”

In fact, Grant added, this year’s prices weren’t unprecedented but lack of seasonal price movement was unusual.

“Prices in the first half of 2023 have been on par with the first quarter of 2022 and June 2020. In fact, January through April had prices slightly below year-ago levels, down one to five per cent,” she said, pointing to Statistics Canada data.

“However, the historical seasonality with spring highs and lower prices going into summer has not occurred. Prices have stayed steady.”

Drought conditions across the Prairies are not as severe as in 2021 in most areas, and U.S. corn prices have been relatively low this summer, but feed grain costs are still having an impact on cattle producers’ bottom line, said Grant.

“While Alberta hay prices are down from last year’s record-high levels in the first half of the year, they remain above the first half of 2021 at around $200 per tonne,” she said, adding that tighter supplies had greater impact.

Domestic beef production was down one per cent in the first quarter and 11 per cent in the second. However, demand for Canadian beef is still going strong as domestic cow slaughter increases.

“Canadian cow slaughter is up five per cent from last year and up four per cent from the five-year average. Larger non-fed production is offsetting some of the decline in youthful beef production,” Grant said.

Meanwhile, U.S. beef cow inventories on July 1 “were down nine per cent from the 2018 peak and are now 1.2 per cent below the 2014 low in the last cycle.”

On the Chicago Mercantile Exchange, there was little change in the highly traded October live cattle contract during the week ended Aug. 10. The price settled at US$182.525/cwt., only $1.225 higher than the week before.

As for the September feeder cattle contract, the price closed at $251.575/cwt. on Aug. 10, compared to $251.650 one week earlier.

Only one Manitoba auction site held a regular sale during the week ended Aug. 10, in Grunthal. Winnipeg Livestock Sales had a regular sale Aug. 11, while Heartland Livestock Services was to resume sales in Brandon and Virden on Aug. 15 and 16.

Killarney and Gladstone Auction Marts are expected to reopen for the fall run on Aug. 21 and 22, respectively, while Ashern Auction Mart will start its fall run Aug. 23 and Ste. Rose Auction Mart will follow suit Aug. 24.

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