Klassen: Drought conditions spur on fall cattle run

Photo: Canada Beef Inc.

Compared to last week, Western Canadian feeder yearling prices were relatively unchanged; calves traded $2 to $5 lower. The fall run has started. Drought like conditions have caused many ranchers to sell cattle 30 to 45 days earlier than normal. Steers averaging 900 pounds were readily trading in the range from $185 to $190; steers weighing 800 to 850 pounds were quoted from $185 to $200. Larger strings traded at a $3 to $4 premium over small groups. While there may have been some heat stress, the quality of cattle coming on the market was excellent.

Many yearlings have been fed hay or silage for the past month.  In some cases, groups fresh off grass sold at a slight premium. Higher feed grain prices influenced calves more than yearlings. Remember that the December live cattle futures are $15 to $18 higher than year-ago levels which is supportive for yearlings. For calves, it’s fairly difficult to know the feed grain six to eight months forward. Therefore, the calf market incorporated a feed grain risk discount. There were groups “fresh off their mothers” which also traded below average levels. Finishing feedlot experienced a positive margin structure this spring so there is no shortage of buying enthusiasm.

In Central Alberta, a medium sized group of mixed yearling steers on forage diet averaging a shade over 900 pounds were quoted at $194; a larger string of one cut tan steers weighing 975 pounds were reported at $189 in the same region. North of Calgary, a small group of Angus blended heifers averaging 900 pounds on light grain silage diet were quoted at $170. In Southern Alberta, a medium sized group of black heifers straight off grass weighing 850 pounds were valued at $186.

In Southwest Saskatchewan, a larger group of weaned calves averaging 600 pounds were valued at $214 fob the farm; in Southern Alberta, Simmental based heifers averaging 625 pounds were quoted at $196. In Central Saskatchewan, Charolais based steer calves averaging 730 pounds were reported at $220. Cow calf pairs were trading in the range of 1900-$2200 in Central and Southern Alberta.

Many sales barns are hosting their first major sales of the season this week. We have a taste of the market but it will be more established over the next couple weeks. Feedlot operators will also have a better idea of the feed grain price structure for the fall period.

About the author

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Jerry Klassen

Jerry Klassen is manager of the Canadian office for Swiss-based grain trader GAP SA Grains and Products Ltd. and also president and founder of Resilient Capital, a specialist in commodity futures trading and commodity market analysis. He can be reached at (204) 504-8339 or visit his website at www.resilcapital.com.

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