Softer slaughter values in Alberta and stronger barley prices have tempered the upward trend in the feeder cattle market. Steers weighing 840 pounds in southern Alberta sold for $116 last week, which was steady with values earlier in November. Limited discounts were shown for Manitoba cattle as 775-lb. steers brought back $115 in the central region. Feedlots are filling up and the sense of urgency to buy replacement cattle has eased.
Cattle that have been on grass for an extended period of time or fed a rich forage ration may not appear hungry. Therefore, discounts are warranted if buyers see that the efficiencies will not be met. I’ve had a few calls from cow-calf producers who have passed on sales. This is not wise because holding onto these cattle will only deteriorate their efficiencies further. Secondly, the same buyers will see these cattle later in fall and may want additional discounts. I’ve talked with many old-timers and passing on bids for fed or feeder cattle will usually come back to haunt you.
The feeder cattle market will function to encourage expansion over the next 12 months. Bred cows are now 150 per cent higher than year-ago levels and current feeder cattle prices are justifying heifer retention. Next spring, I’m concerned that barley prices may surge higher and delay the expansionary phase in the cattle cycle.
— 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] or 204-287-8268 for questions or comments.
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