Compared to last week, western Canadian yearling prices were relatively unchanged while calf values were extremely variable. In Alberta, calf prices were holding value but in Saskatchewan and Manitoba, feeder cattle under 650 lbs. were $3 to as much as $8 lower in some cases.
Recent rains in Saskatchewan have come too late and auction barns are advertising cow-calf pair sales. Pastures have deteriorated and feed prices are too high for many producers to hold cattle over the summer. Cow-calf pairs are readily selling for $1,500 to $2,200. In many cases, the buyer will eventually split the pair and both will end up in a feedlot. In southern Alberta, a 600-lb. steer calf is near $1,400 so the market is encouraging the breakup. Droughts and high feed grain prices are negative for the cattle industry longer-term. The feeder market softens in the short term while six months later, supplies of feeders are relatively tight, causing the market to move to extreme highs.
Alberta packers were buying fed cattle on a dressed basis in the range of $245-$247 delivered, up $2-$5 from seven days earlier. Alberta fed cattle traded from $147-$148 on a live basis, up $2 on average from week-ago levels. The fortuitous bounce in fed cattle renewed optimism in the yearling market. Mixed medium-frame steers averaging 980 lbs. were valued at $162 in central Alberta; in southern Alberta, red and tan mixed medium-frame steers with very little butter weighing just over 800 lbs. were valued at $187. Simmental mixed steers averaging 780 lbs. were valued at $193 near Lethbridge.
The calf market was hard to define in Manitoba and Saskatchewan with only small groups available. In southern Manitoba, mixed steers averaging around 615 lbs. were quoted at $215; central Saskatchewan mixed steers weighing 625 lbs. were reported at $210; in central Alberta, tan steers weighing 590 lbs. were valued at $228.
Barley prices remain hot, with Lethbridge-area bids surfacing at $300 per tonne delivered while September bids have edged up to $240 per tonne delivered. Statistics Canada’s next acreage report will be out Wednesday and the U.S. Department of Agriculture will release its plantings report on Friday. These reports are expected to set negative tones for the feeder complex.
— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and 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.