Feeder cattle prices across Western Canada were steady to $2 higher on average with stronger demand surfacing in the lighter weight categories.
Pee-wee steer calves under 350 pounds sold for $186 per hundredweight (cwt) in central Alberta, which is near all-time record highs for any weight category. Black Angus-based age-verified steer calves averaging 528 lbs. moved at $159/cwt in southern Alberta.
On the heavier end of the replacement scale, Charolais steers around 850 lbs. were averaging $130-$133/cwt delivered to the feedlot in central Alberta. The market is strong with very little slippage on quality for any type of cattle. Fed cattle were firm touching $104, underpinned by the weak Canadian dollar late in the week.
The U.S. cattle on feed report was considered bullish for fed and feeder cattle. August placements were down one per cent in comparison to August 2010, which was a surprise to the industry. The market is now anticipating a sharp drop in first-quarter beef production, which should cause feeder cattle to percolate higher over the winter. In Bassett, Neb., steers averaging 936 lbs. sold for $130. Feedlots south of the border have some breathing room now that corn has dropped over $1 per bushel from the highs.
The cattle market has shrugged off recessionary fears as the market focuses on lower available supplies. April live cattle futures are poised to retest contract highs which should give western Canadian feedlot operators an opportunity to lock in favourable margins for winter and spring 2012. Feeder cattle have room to move higher, given the positive margin structure.
— 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] or at 204-287-8268 for questions or comments.