Understanding risk for feeder cattle: Pt. 3

The Markets: Don’t buy unless the basis is favourable for a profit

This is the third article in the ‘Understanding risk for feeder cattle’ series. I started by explaining the feeder cattle futures market and basic theory of hedging. The second column focused on average basis levels and using these basis levels to forecast an expected selling price. I analyzed the risk and reward of backgrounding 550-pound […] Read more

General movement toward higher production

Market Update: Feeder cattle prices may not get much better than they are right now

Fed cattle prices were hovering in the range of $158 to $160 in mid-February, slightly lower than month-ago levels. The markets are relatively strong and I’m expecting the yearly highs to occur over the next month. First-quarter beef production is coming in marginally lower than anticipated, but supplies are building. The recent cattle-on-feed report and […] Read more


Understanding feeder cattle risk: Pt. 1

Market Update with Jerry Klassen: A hedging program can remove some of the uncertainty

In the January 24 Grainews issue, I explained the feeder cattle futures market and the simple mechanics of hedging feeder cattle. In this column, I want to take one step further and discuss the financial risk associated with backgrounding or selling feeder cattle. Read more: Important to understand the futures Read more: Producers hit with […] Read more

Important to understand the futures

Market Update: Learn to use hedging tools when selling calves

Over the past year, I’ve received many inquiries from cow-calf producers about hedging feeder cattle. Most producers calve during the winter or spring and sell their feeders in the fall or the following winter after backgrounding. We’ve all seen how the prices can change within a six- to 10-month period. One of the most common questions I […] Read more


Producers hit with ‘sticker shock’

Market Update: Bottom of the market may be in sight in mid-2017

There was an old saying on the trading floor — “Up the mountain; down the mountain.” After extreme highs; traders need to prepare for extreme lows. Earlier in summer, I thought the cattle markets would start to stabilize and maybe turn around in October. However, I have to eat my words because as of mid-October, […] Read more

Higher production keeps beef prices under pressure

Higher production keeps beef prices under pressure

Market Update: Slaughter numbers are down, but carcass weights are up

Fed and feeder cattle prices have come under pressure over the past couple of weeks as the market absorbs the year-over-year increase in second quarter beef production. Cattle-on-feed inventories in Canada and the U.S. are running slightly above year-ago numbers, but carcass weights are sharply higher. Despite the lower cattle prices, retail beef prices are […] Read more


Canadian dollar likely to fall lower in value

'Ill-conceived' deficits don't help the economy in the long run

I’ve received many inquiries from cattle producers regarding the outlook for the deteriorating Canadian dollar. Many cattle producers don’t watch daily market activity and recently, we’ve seen sharper changes from week to week as the Canadian recession deepens. A dovish monetary policy from the Bank of Canada along with left-leaning fiscal policy from the ruling […] Read more