Western Canadian feeder cattle prices reflected a mixed tone over the past week with values $3 to $5 higher on vaccinated preconditioned calves; unvaccinated calves just off their mothers were $3/cwt to as much as $10/cwt lower in some cases. Yearling prices were also quite variable by as much as $10/cwt despite the tightening supply scenario.
Cow-calf producers were scratching their heads wondering about irregular price action in a matter of minutes at many feature sales this past week. It appears that price discounts on quality features have become more extreme at these higher levels due to uncertain weight gains and sharper financial risks. Adverse weather forecasts for southern Alberta also contributed to the softer tone on unweaned calves or any group showing signs of stress. Financial constraints have limited the buyers’ power this fall while the number of cattle available is similar to last year which is also causing the current environment.
Cattle buyers also had a difficult time describing market conditions given the extreme nature. Larger-frame angus based steer calves just under 500 pounds were quoted at $308/cwt landed in southern Alberta. Similar weight Simmental medium-frame fleshier calves were valued at $284/cwt landed in the Lethbridge area. Each group of feeder cattle is valued individually depending on the risk-reward factor. Healthy preconditioned light flesh group of semi-backgrounded exotic steers averaging 775 pounds sold for $240/cwt in southern Alberta which was considered good value.
Feed barley was $4/mt higher this week trading at $187/mt in the Lethbridge area while feed wheat was quoted at $184/cwt. Average wheat quality in Western Canada appears to be better than expected and record high rail rates has tempered imports of U.S. corn. The barley market is trending higher but right now the focus is on fed cattle prices to justify the price structure for feeders. Alberta packers were buying fed steers in the range of $169/cwt to $172.50/cwt which was a fresh all time high.
The cattle complex continues to shrug off adverse economic news as the consumer shows no sign of easing demand. Extra lean ground beef prices are 33 per cent higher than year-ago levels while wholesale beef prices have increased by 25 per cent during the same time; therefore, cattle prices are on stable footing for the time being.
– 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.