After a softer tone during the third week of April, western Canadian feeder cattle values stabilized trading steady to $5 higher on average this past week. Notable gains were noted on cattle under 700 pounds in Manitoba and Saskatchewan, where prices were $3 to as much as $8 higher. Available feeder cattle supplies are starting to dwindle at this time of year and larger packages traded $3 to $5 above smaller groups of similar weight.
Despite the strengthening Canadian dollar, U.S order buyers were once again extremely busy, shopping for all weight categories as steers in southern Saskatchewan ranging from 500 to 550 pounds sold up to $350. Major feedlot operations in Alberta were more aggressive on improving feedlot margins. Alberta packers were buying fed cattle in the range of $201-$202, marginally higher in comparison to prices seven days earlier.
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Lower-flesh, controlled weight gain backgrounded heifers averaging 850 lbs. sold for $235 directly off farm in the Lethbridge area. In central Alberta, medium-flesh exotic steers averaging 700 lbs. sold for $290. Eastern Saskatchewan and Manitoba prices were very similar, with larger-frame Charolais steers just over 600 lbs. selling in the range of $319-$322. Steer calves weighing around 500 lbs. were solidly trading in the range of $350-$354 in southern Saskatchewan. Cattle feeders view lighter-weight calves with less risk and potentially greater reward, given the longer timeframe. Therefore, larger feeding operations have been more aggressive on these cattle. We’ve seen two different markets: one for calves, which appear to be based on current supply and demand, and one for shorter-keep cattle, valued on the current feeding margins.
Food cost inflation appears to be diminishing due to lower-cost energy and improving wages. While beef stocks are above year-ago levels, the industry is looking for stronger beef consumption over the next month, which should keep fed cattle supported and feedlot margins in healthy territory. Major feedlot operations were anxious to gain ownership this past week. Fed cattle marketings will increase over the next month and they want sufficient numbers through the summer.
— 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.
