A backlog of fed cattle that has adversely affected feedlots should start to clear soon, says a livestock economist with Alberta’s agriculture department.
Feedlots in Alberta and Saskatchewan had plenty of fed cattle supply at the end of 2022 and fed cattle basis levels were wide, said Ann Boyda.
“Any further backlog is expected to be alleviated by February,” Boyda said in a mid-January Agri-News article. “Basis levels should start to strengthen in February and bids should be stronger in March and April.
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“Feedlot margins are expected to increase and, in combination with an improved demand for replacement cattle, feeder cattle prices are expected to strengthen over the summer 2023.”
But it’s not clear sailing, she added.
“The future for the feeder cattle market looks optimistic, but it is important to keep in mind that feed prices are still high and profits difficult to sustain for any extended period.
“Much still rests on what rainfall levels will be like in the spring as soil conditions are still relatively dry in many parts of the province. As of Dec. 21, snow pack accumulation was reported as normal. Hopefully there will be enough snow to recharge surface water supplies, but timely spring rains will still be critical.”
While cattle markets faced many challenges last year, they saw the highest prices since 2014-15.
The average fed steer price was 11 per cent higher than a year earlier and the average 550-pound steer price was 10 per cent higher. Light feeder steers also fetched strong prices in the second half of the year.
Total Canadian slaughter volume for 2022 was estimated at 3.23 million head, up one per cent from a year earlier. Steer slaughter numbers fell 2.6 per cent while those for beef cows and heifers were four and 5.2 per cent higher, respectively. This would suggest tighter production in 2023, the Agri-News story said.
