Western Canada’s calf prices once again jumped $4-$8 per hundredweight (cwt) while yearling prices advanced a solid $2-$4. Strength in the fed cattle market, along with stronger wholesale beef values, rejuvenated buying enthusiasm for all weight categories.
Alberta packers were buying fed cattle $2-$3/cwt above week-ago levels with fed steers trading in the range of $162-$165. There is no shortage of buying interest for feeder cattle, with larger feedlot operators setting the price structure at the higher levels. The yearling run was shorter than anticipated and many operators would like to be carrying larger numbers at this time of year. Industry comments reflected that larger players were also more active placing feather-light calves into smaller backgrounding lots this week. Feeder cattle under 400 lbs. continue to trade upward of $375-$385/cwt. These smaller backgrounding producers are willing to take on more custom feeding work this year as they realize prices are often out of reach.
In Manitoba, U.S. orders often overtook demand from Alberta origin, due to the competitive edge of the stronger greenback. U.S. wholesale choice beef prices surged $7, reaching $245/cwt, which reinforced ideas of stronger beef consumption. This appeared to be the main factor that shifted the fed and feeder markets into high gear late in the week. Consumers are pulling the cattle markets higher with a surge in spending behaviour anticipated over the next couple of months.
A mixed group of steer calves with no special feature, averaging just over 500 lbs., sold for $305/cwt in central Alberta. Black Angus-based steers weighing 650 lbs. were quoted at $276/cwt landed in the Lethbridge area feedlot. Larger-framed medium- to lower-flesh Simmental-based steers averaging 850 lbs. were quoted just under $250/cwt landed in southern Alberta.
Feedlot margins improved this past week with stronger fed prices and continued pressure on feed grain values. Feed wheat is coming on the market more readily in central and southern Alberta, now that the harvest is wrapped up. Risk management programs offered by the provincial governments have also enhanced buying confidence for all producers. Current prices allow producers to lock in margins at a reasonable cost, ensuring profitability over the winter. I believe these programs are a positive influence on the feeder market, adding stability at the higher prices.
— 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] for questions or comments.