Western Canadian feeder cattle prices were relatively unchanged this past week after a surge in buying interest earlier in February.
Certain auction markets reported values $2 to $5 higher in Alberta, but other reports from Saskatchewan and Manitoba were actually a bit softer. A smaller group of exotic steers weighing just under 500 pounds sold for $336 in central Alberta, while similar-weight cattle were $3-$4 lower in eastern Saskatchewan. The smaller-farmer backgrounding operation is in liquidation phase and does not appear to be anxious to reload. Calves under 600 lbs. are $15-$20 higher compared to last October, so there are fewer buyers in the lighter weight categories.
Backgrounded replacements dominated the trade this past week; therefore, the market is adjusting for a fresh fundamental structure. Shorter-keep cattle have different cost and risk factors and the market can be quite variable depending on the earlier feeding quality of these cattle. Lower-flesh larger-frame steers averaging 700 lbs. were quoted in the range of $260-$263 in Manitoba. Medium-flesh average-frame steers from 700 to 750 lbs. in central Alberta were in the range of $250-$260. A well trained eye along with a sharp pencil is needed to define the market on these replacements.
Alberta packers were relatively on the sidelines, buying a small volumes on a dressed basis. The U.S. fed market was $2 lower, with cattle in the southern Plains trading at $160. Major feedlots in Alberta and Saskatchewan are comfortable with current inventory levels and are concerned about the margin structure for the summer timeframe.
Bred heifers and bred cows are quite strong, trading from $2,800 to $3,600. Prices now reflect the present value of future earnings and grain-finished cows are $130-$140. Cow-calf producers appear to have more confidence, given the margins over the past year and finished cow 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.