Klassen: Feedlot operators become cautious on purchases

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Published: May 13, 2025

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Photo: Geralyn Wichers

For the week ending May 10, Western Canadian feeder cattle markets traded steady to $5 higher on average. Quality packages of lighter calves were priced $10-$15 above week ago levels. Many auction barns are only holding sales every two or three weeks at this time of year with limited numbers on offer. This made the market hard to define in certain weight categories.

Ontario buying interest has subsided, while some operations from Alberta have also halted purchases for the time being. The feeder market is functioning to ration demand. Prices are now high enough so that feedlots are backing away from the market.

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At the Ponoka sale, medium to lower flesh Charolais Angus blended steers on corn silage and grain screenings diet with full processing records averaging 993 pounds traded for $379.

At the same sale, a handful of larger frame red Angus based steers weighing 882 pounds with full feeding and processing data notched the board at $401.  In central Alberta, larger frame Simmental based heifers with various flesh levels weighing a shade over 900 pounds on light grain and silage diet were valued at $370 fob farm.

In southern Alberta, wide frame lower flesh black Limousin based steers weighing 805 pounds apparently traded for $451. In the same region, Simmental cross heifers averaging 802 pounds were quoted at $405.

At the Rimbey sale, a handful of Charolais Simmental cross steers on silage and hay diet with preconditioning health with a mean weight of 743 pounds set the bar at $464. In southern Alberta, quality genetic packages of steers weighing 700 pounds were quoted from $480-$495.

In the Calgary region, a smaller package of  mixed steers weighing with a mean weight of 600 pounds traded for $560. At the Vermillion sale, there was a larger group of heifers averaging 614 pounds that traded for $536/cwt.

At the Westlock sale, a smaller package of Angus mixed heifers on silage and hay diet with full herd health records averaging just under 500 pounds sold for $570. At the same sale, a smaller package of run-of-the-mill steers evaluated at 492 pounds silenced the crowd at $599.

Alberta packers were buying fed cattle on a live basis at $292-$294/cwt fob feedlot, unchanged from last week. Current breakeven pen closeouts are in the range of $260-$265. While margins are favorable in the short term, feeders coming into the feedyards this week don’t pencil profitably.

The October live cattle futures have been hovering around $206 which is a $12 discount to the nearby U.S. cash market. If the deferred live cattle futures don’t strengthen by US$15, southern Alberta losses during October are going to be in the range of $300-$400 per head.  Needless to say there is a fair amount of risk owning replacements at the current levels.

About the author

Jerry Klassen

Jerry Klassen

Jerry Klassen graduated from the University of Alberta in 1996 with a degree in Agriculture Business. He has over 25 years of commodity trading and analytical experience working with various grain companies in all aspects of international grain merchandising. From 2010 through 2019, he was manager of Canadian operations for Swiss based trading company GAP SA Grains and Products ltd. Throughout his career, he has travelled to 37 countries and from 2017-2021, he was Chairman of the Canadian Grain and Oilseed Exporter Association. Jerry has a passion for farming; he owns land in Manitoba and Saskatchewan; the family farm/feedlot is in Southern Alberta. Since 2009, he has used the analytical skills to provide cattle and feed grain market analysis for feedlot operators in Alberta and Ontario. For speaking engagements or to subscribe to the Canadian Feedlot and Cattle Market Analysis, please contact him at 204 504 8339 or see the website www.resilcapital.com.

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