Compared to last week, western Canadian yearling markets traded $2-$4 on either side of unchanged; calf prices held value, but there were pockets like Lethbridge where values were $2-$4 higher. Alberta packers were buying fed cattle on a live basis in the range of $156-$158. If an Alberta feedlot booked its feed grains in April at the time of buying the feeder cattle, there’s about a $30 per head margin on pen closeouts.
The yearling run is in the final stages and finishing feedlots were aggressive on quality packages off grass. Ontario demand was noted in the eastern Prairie regions and in some cases, Manitoba prices were a $2-$3 premium over Lethbridge. Buyers commented that the quality of cattle was variable.
August rains rejuvenated pastures in Saskatchewan and Manitoba. Daily gains improved late in the season and fleshier conditions are noted in some regions. The market has been quick to adjust and we’ve seen a variable price structure because feed efficiencies may be lower on these yearlings.
In central Alberta, a medium-sized group of mixed heifers coming off wheat ration with full health program averaging 890 lbs. sold for $170; Charolais-blended heifers averaging 900 lbs. with full health records coming off greenfeed diet were valued at $177. In the Calgary area, medium-frame black heifers averaging 830 lbs. with full health records coming straight off grass averaging 830 lbs. were reported at $185. South of Edmonton, tan mixed steers averaging just over 900 lbs. coming straight off grass with full health records dropped the gavel at $196. In Manitoba, a small group of Charolais-based steers averaging 875 lbs. were quoted at $200 and mixed steers averaging 850 lbs. were valued at $202.
In the Lethbridge area, black fancy steers weighing just over 500 lbs. were quoted at $233; similar-quality heifers averaging 560 lbs. were quoted at $194. In central Saskatchewan, tan steers averaging 500 lbs. were reported at $230 and black Limo-based heifers averaging 525 lbs. were valued at $186. In Manitoba, red white-face steers weighing 450 lbs. reached up to $248 and similar-quality and -weight heifers were quoted at $206. In central Alberta, mixed steers weighing 436 lbs. were valued at $245 and mixed heifers weighing 425 lbs. were reported at $215.
The market will likely be fairly strong next spring for backgrounded cattle, given the strength in the deferred live cattle futures. Weather conditions have been excellent across the Prairies. Corn silage in southern Alberta is well underway so processing hands are fairly busy. Feed grain prices remain firm. Feedlot capacity will fill up sooner than last year due to larger placements in the summer months. The cattle feeder placing cattle in a custom lot has experienced a couple years of tough margins, lowering replacement demand.
— Jerry Klassen 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.