Western Canadian feeder cattle prices jumped $4-$6 over the past week as strengthening feeding margins enhanced buying interest for replacement cattle.
Noticeable gains were noted in eastern Saskatchewan and Manitoba early in the week and Alberta markets followed the charge higher. Cattle buyers in southwestern Manitoba reported mixed steers averaging 900 pounds readily trading from $240 to $242; Charolais-cross silver larger-frame steers weighing 823 lbs. dropped the gavel at $256 in the Edmonton area. Quality cattle will be hard to come by a month from now, and feedlot operators were looking to secure supplies in a very hot market. U.S. feeder cattle were also $4 to $6 higher and it was hard to compete with the “just get ’em” orders from south of the border.
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Grassers were well bid across the Prairies, supported by favourable weather forecasts, which should green up pastures significantly sooner than last year. Southern Saskatchewan producers were talking about the few loads of fancier steers just under 500 lbs. that reached up to $365. The smaller farmer/cattle producer with available grass isn’t shying away at the higher levels. Major feedlot operators were also more aggressive on grassers this week in an effort to secure yearling supplies for the fall period.
Alberta packers were buying fed cattle at $198, a historical high and about $6 above Alberta breakeven pen closeout values. Wholesale choice beef prices surged last week, touching US$250 per hundredweight, levels we haven’t seen since November 2014. Lower-than-expected beef production, rejuvenating post-Easter demand and a weaker Canadian dollar continue to drive feeder cattle higher in the short term.
Barley was trading at $208 per tonne delivered in the Lethbridge area, but feed wheat was actually lower, at $203 per tonne, fob the feed mill.
For September delivery, 900-lb. steers were being contracted at $240 in southern Manitoba this past week. Fed and feeder cattle futures appear to be incorporating a risk premium due to the uncertainty in beef production. The stronger futures and weak Canadian dollar is allowing producers a good opportunity to take some of the risk off the table.
— Jerry Klassen is a commodity market analyst in Winnipeg and maintains an interest in the family feedlot in southern Alberta. He writes an in-depth biweekly commentary, Canadian Feedlot and Cattle Market Analysis, for feedlot operators in Canada. He can be reached by email at [email protected] for questions or comments.
