The Alberta fed cattle market was quoted on a live basis in the range of range of $262-$265/cwt fob feedlot last week. Fed cattle forward contracts for March and April delivery (Alberta) were quoted from $270 to $272/cwt. Compared to last week of November 2024, fed prices are up $20/cwt on average.
Strength in the fed market has pulled up feeder cattle prices for all weight categories. Cattle on feed 120 days or longer in Alberta and Saskatchewan, as of December 1, 2024, were 115,114 head, down 35 per cent from December 1, 2023. Alberta packers appear to increasing buying interest and feeding margins have improved.
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For the week ending January 3, there was no real test of market conditions in Western Canada. In Oklahoma City, Oklahoma, feeder steers and heifer traded US$8-US$12/cwt higher with steer and heifer calves up US$10-US$15/cwt. Fed cattle in Kansas and Texas were quoted from US$195-US$196/cwt. This is up from prices of US$190-US$191/cwt during the week ending December 21. U.S. wholesale beef prices during the first week of January was quoted at US$323/cwt. This is up US$3/cwt from the December 2024 average price and up US$34/cwt from mean of January 2024.
For the week of January 4 -10, our price projections for Western Canadian feeder markets are based on U.S. values. Compared to the week ending December 21, we’re expecting feeder cattle prices across the Canadian prairies to be up $8-$12/cwt. In the major feeding regions of Alberta, values may be up as much as $15/cwt. We’re expecting higher quality genetic, lower flesh steers around 900 pounds to trade in the range of $358-$365/cwt while 800-pound steers could reach $380-$390/cwt.
Feedlots will bid up the mid-weight categories so margins cover variable costs (feed and interest only). This is typically the upper price limit for the calves. Based on the deferred live cattle futures, decent quality 700 pound calves could trade from $420 to $430/cwt while 500 pound calves will likely be bid up to $550/cwt.
U.S. buying interest is expected to be very aggressive in Western Canada. The timeline to open the U.S. border to Mexican feeder cattle is uncertain. A year-over-year increase in feeder cattle exports is projected during January. The bulk of cattle moving south will be from Manitoba and Eastern Saskatchewan. Keep in mind the Canadian dollar remains under 70 U.S. cents. Weather conditions in Southern Alberta are expected to be favorable to settling and processing replacement cattle this week.
— Jerry Klassen is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339 or via his website at ResilCapital.com.
