Latest articles


Cattle market endures volatility

Market Update: Beef oversupply will be an issue unless consumer spending picks up

Alberta fed cattle prices reached up to the range of $195 to $197 during the first week of May due to tight market-ready supplies and adverse weather in the U.S. southern Plains. The futures market has been trading at a sharp discount to the cash trade throughout winter and spring, causing feedlots to be aggressive […] Read more


Consumer spending favours beef market

Market Update: Food prices have been down, so shoppers have more money for beef

The fed and feeder cattle markets continue to hold value despite the year-over-year increase in beef production. Alberta packers were buying fed cattle in the range of $175 to $177 in late April. Wholesale beef prices have been surprisingly strong as beef demand continues to exceed expectations. Major economic indicators are fairly encouraging which should […] Read more



What is the cattle futures market saying?

The combination of cash and futures market numbers will point the way

I’ve received numerous calls over the past month from cow-calf producers and backgrounding operators in regards to a marketing strategy for their individual operation. In four previous articles I’ve discussed the feeder cattle futures market and the historical relationship between the cash and futures market. I analyzed basis levels and discussed using the basis and futures for […] Read more


If you see a profit, take it

Markets have improved, but it likely won’t last

Fed and feeder cattle have been percolating higher over the past month as the market moves through a period of seasonal low beef production. Restaurant traffic sharply improves in March and April, and retail beef movement also increases. Consumers generally start eating more once spring rolls around and this year, the health of the overall […] Read more



Understanding feeder cattle options

The Markets: Using a “put” option to avoid margin calls


In the previous three columns on feeder cattle marketing (found in the ‘On our network’ column on the right-hand side of this page), I’ve discussed hedging feeder cattle production using the feeder cattle futures market. Many producers hesitate to use a futures market because of the cash flow requirements. When you sell a futures contract, there […] Read more


Understanding risk for feeder cattle: Pt. 3

The Markets: Don’t buy unless the basis is favourable for a profit

This is the third article in the ‘Understanding risk for feeder cattle’ series. I started by explaining the feeder cattle futures market and basic theory of hedging. The second column focused on average basis levels and using these basis levels to forecast an expected selling price. I analyzed the risk and reward of backgrounding 550-pound […] Read more



General movement toward higher production

Market Update: Feeder cattle prices may not get much better than they are right now

Fed cattle prices were hovering in the range of $158 to $160 in mid-February, slightly lower than month-ago levels. The markets are relatively strong and I’m expecting the yearly highs to occur over the next month. First-quarter beef production is coming in marginally lower than anticipated, but supplies are building. The recent cattle-on-feed report and […] Read more


Understanding feeder cattle risk: Pt. 2

Market Update with Jerry Klassen: You don’t want to be using marketing tools to lock in a loss

The feeder cattle market has experienced extreme volatility over the past three years. For this reason, I’ve been writing on managing financial risk for feeder cattle and particularly for backgrounding operations and cow calf producers. In the first column, I discussed the mechanics of hedging, explained historical basis levels and using these basis levels to […] Read more



Understanding feeder cattle risk: Pt. 1

Market Update with Jerry Klassen: A hedging program can remove some of the uncertainty

In the January 24 Grainews issue, I explained the feeder cattle futures market and the simple mechanics of hedging feeder cattle. In this column, I want to take one step further and discuss the financial risk associated with backgrounding or selling feeder cattle. Read more: Important to understand the futures Read more: Producers hit with […] Read more


Short-term gains, long-term pains

The market still needs to discourage beef production — and that hurts

Fed and feeder cattle prices have been percolating higher recently as the markets adjust to lower-than-expected first-quarter beef production. Alberta fed cattle prices have been hovering in the range of $162 to $165, which is approximately $25 above break-even pen closeout values. Healthy feedlot margins allowed feedlots to bid up feeder cattle prices. Larger-frame steers […] Read more