Western Canadian feeder cattle prices were $2 to $4 per hundredweight (cwt) higher than week-ago levels. Auction markets are starting to experience larger volumes and feedlots are running with seasonally low numbers.
Feedlot managers are stepping forward more aggressively with the deferred feeder and live cattle futures pointing to higher prices into the fall period. Barley prices jumped $5 per tonne last week but this did little to temper buying enthusiasm. Equity markets are trading near yearly highs; financial markets appear to be factoring stronger growth into the fourth quarter, which should bode well for retail and restaurant beef demand.
Alberta packers were buying fed cattle in the range of $108-$110/cwt, down $2-$3 from seven days earlier. In central Alberta, top-quality steers weighing just over 600 pounds were selling in the range of $155-$162/cwt; a small group of silver steers averaging 740 lbs. reached up to $150/cwt. A group of run-of-the-mill red Angus cross steers with a weight range of 790-830 lbs. sold for $141/cwt. The market is firm, with buyers paying a premium for quality cattle. Due to the high feed costs, feedlots need efficiency on the weight gains.
The barley harvest is approximately 60 per cent complete as of Sunday and harvest pressure from farmer selling is subsiding. Once the combines quit rolling, the market will have to draw stocks out of very tight hands, with farmers experiencing record-high grain prices. Look for further upside in barley prices, which will influence buying behaviour for feeder cattle. Live cattle futures need to move higher to offset the stronger feedgrain prices.
Disposable income for the average North American consumer is approximately 3.5 per cent higher than last year this time. U.S. unemployment data for August was disappointing but the restaurant and hotel industries are experiencing stronger traffic in comparison to last year. September is a sluggish month for restaurants but there is considerable optimism for the fourth quarter.
-- 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 firstname.lastname@example.org for questions or comments.