Klassen: Feeder cattle upward price trend continues

Western Canadian feeder prices for 800-plus-pound cattle were generally steady with week-ago levels while lower weight categories experienced a week-over-week gain of $3-$6 per hundredweight (cwt).

Strength in the U.S. feeder complex led the surge higher on grassers and lighter weight feedlot placement cattle. Healthy feedlot margins continue to support the overall feeder complex and stronger demand was noted for quality heavier yearlings. In one month, auction market volumes will start to decline and there appeared to be an aggressive nature amongst larger feedlot operations to fill pens, now that moderate temperatures have set in. If buyers wanted quality feeder cattle, they had to pay the price, because waiting is not an option nor has it been beneficial this past winter.

The U.S. Department of Agriculture reported that in Bassett, Nebraska, fancy 750-lb. steers sold for the magical $200/cwt price. U.S. prices were generally $3-$6/cwt higher last week, setting the tone for the Canadian market. Black Angus-based steers weighing 697 lbs. sold for $205/cwt in southern Alberta. Similarly in central Alberta, a smaller group of Charolais-based steers weighing 693 lbs. reached $198.50. Alberta packers bought fed cattle in the range of $145-$146/cwt, up $2/cwt from seven days earlier; however, the market in the U.S. showed the first sign of breaking with dressed prices in Nebraska dropping $4-$5/cwt. Live sales in Nebraska were also down $4/cwt, trading at $148/cwt. U.S. wholesale choice beef prices were quoted $7/cwt lower last week, at $232/cwt.

It is that time of year where fed cattle prices seasonally start to soften, so this is something to watch moving forward. Secondly, barley prices in Lethbridge continue to percolate higher, touching $194 per tonne. Feedlot margins have some breathing room in the short term as input prices increase; however, the main point is that the feeder market is not getting more bullish, but rather turning neutral. Feedlot margins are coming off the highs and with December corn futures at $5 a bushel, new-crop feed grain production is uncertain.

— 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.


About the author



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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