In central Alberta, Simmental based steers weighing 900 pounds on barley and silage diet with full processing data were valued at $405/cwt fob farm. In east central Alberta, black wide frame Limousin based steers averaging 825 pounds supposedly sold for $460/cwt.

The Killarney market report in Manitoba had red heifers weighing just under 900 pounds selling for $391/cwt. At the Ste Rose sale, a smaller package of red heifers with a mean weight of 795 pounds were marked at $425/cwt.

The Ponoka market report had a handful of red mixed steers evaluated at 709 pounds on hay and silage diet with full preconditioning data moving through the ring at $500/cwt. At the same sale, tan heifers scaled at 700 pounds on a diet of silage and pellets with full processing data dropped the gavel at $486/cwt.

At the Westlock sale, a smaller package of Angus Simmental cross 650 pound heifers on hay and barley diet with full processing records sold for $467/cwt. At the Ste Rose sale, the market report had black heifers averaging 616 pounds trading for $512/cwt.  In the Calgary region, a smaller package of Charolais weaned steers weighing just over 600 pounds were quoted at $573/cwt.

The Ste Rose Auction market report had Charolais steers averaging 555 pounds moving through the ring at $610/cwt. A buyer in central Alberta reported that Angus cross weaned heifers on the card at 560 pounds sold for $530.

The USDA estimated U.S. fourth quarter beef production at 6.650 billion pounds, down from the 2024 final quarter output of 6.882 billion pounds. If the U.S. border stays closed to Mexican feeders for an extended period, U.S. fourth quarter beef production forecasts would likely drop to 6.400 billion pounds. This would drive the December live cattle futures higher and support the yearling market during July and August.

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It’s that time of year when major operations are stepping forward more aggressively. Yearlings that have been grounded on light grain and silage were trading anywhere from $15 to as much as $25 discount to those straight off grass. The market for grass yearlings has been bid up high enough that margins barely cover feed costs based on deferred fed cattle prices. This may be one signal that prices are rationing demand at the current levels.

In central Alberta, medium- to larger-frame mixed steers straight off grass with full health records averaging a shade over 1,000 lbs. sold for $299. North of Calgary, lower-flesh backgrounded mixed steers on light grain and silage ration averaging 990 lbs. were last bid at $285. South of Edmonton, Simmental-based steers averaging 900 lbs. straight off grass were quoted at $323. In the same region, tan heifers off grass weighing 905 lbs. were valued at $298. In central Saskatchewan, black Angus-based steers off grass averaging 875 lbs. notched the charts at $320. In southern Alberta, a larger group of Angus heifers weighing 836 lbs. traded at $303.

Southeast of Calgary, Limousin-based steers weighing 725 lbs. dropped the gavel at $358 and similar-quality heifers weighing just over 700 lbs. moved the yardstick at $325. South of Edmonton, a handful of unweaned mixed steers weighing 630 lbs. silenced the crowd at $355. In central Saskatchewan, black mixed weaned steers with a scale weight of 650 lbs. were last bid at $363. Southeast of Saskatoon, mixed weaned heifers with exotic features averaging 610 lbs. were quoted at $320.

In central Alberta, a handful of tan weaned steers with an average weight of 515 lbs. were purchased for $390. Near Lloydminster, a small group of red and black heifers averaging 417 lbs. were quoted at $385.

The calf market is becoming more defined as volumes increase. Statistics Canada will release its July 1 cattle inventory report later in August and this has potential to move the market if calf numbers are down significantly from last year. This may be spurring on demand in the short term.

— 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.

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The latest cash-and-stock offer at $44.40 per share, will allow Ritchie to tap into a growing market for heavy machinery and equipment, salvaged cars, trucks and motorcycles, as well as auto parts (all figures US$).

Chicago-based IAA’s online auction systems specialize in the marketing of “total-loss, damaged and low-value” vehicles and equipment, while Burnaby, B.C.-based Ritchie Bros. operates online and live auction markets in several sectors, including farm equipment, for which it has five live-auction facilities in Western Canada and seven in the U.S.

IAA shares rose 4.9 per cent in morning trade, while Ritchie Bros.’ Toronto-listed shares were up three per cent.

The improved offer comes at a time when many companies are reducing costs and initiating layoffs in face of a potential economic downturn.

Shareholders of both the companies had initially pushed back the deal, set to be Ritchie’s biggest, and raised concerns about the poor structuring of the combination.

However, on Monday, IAA’s largest shareholder Ancora supported the revised bid. The activist investor had earlier questioned the sales process and the absence of a go-shop period.

Ritchie also said that Starboard Value chief Jeffrey Smith will join its board, with the activist investment firm making a $500 million investment.

“We look forward to benefiting from Jeff’s expertise and working together as we complete this transaction,” said Ann Fandozzi, CEO of Ritchie Bros.

Under the revised offer, IAA stockholders would receive $12.80 in cash, up from $10 earlier, and 0.5252 Ritchie Bros. share for each IAA share, down from 0.5804.

Ritchie made the initial offer in November, valuing the company at about $7.3 billion, including debt. That announcement triggered a large-scale selloff by investors, sending Ritchie’s stock down 18 per cent.

The deal will be put to vote for shareholders of both companies on March 14. The shares underlying Starboard’s investment will not be voted at the meeting, Ritchie said.

— Reporting for Reuters by Priyamvada C and Aishwarya Nair in Bangalore.

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The quality of cattle coming on stream was quite variable last week. Feedlot staff reported very scrawny calves coming through the chutes for processing this week. It appears ranchers are liquidating the “stragglers” or “late bloomers.” There are still a fair number of backgrounded cattle coming onto the market but many of these higher-quality groups are moving directly off farm to finishing operations. Harder-flesh yearlings are moving through the ring and the trained “buyer’s eye” was quick to back away. Many auction markets experienced lower numbers last week; there was only a handful of buyers at some smaller sales. This environment also contributed to the weaker price structure because there was very little competition.

In central Alberta, larger-frame Simmental based 980-lb. steers with heavier flesh levels were quoted at $169; similar quality heifers averaging 920 lbs. were valued at $156. In southern Alberta, mixed red and tan steers weighing 840 lbs. were quoted at $185 landed in the feedlot. Red white faced heifers weighing 835 lbs. were quoted at $158 in the Lethbridge area.

East of Saskatoon, thinner mixed steers weighing 670 lbs. were quoted at $217 while medium-frame red mixed heifers weighing 715 lbs. were valued at $168. In southwestern Saskatchewan, thinner Charolais mixed 530-lb. steers were quoted at $238 and similar-quality heifers averaging 515 lbs. were valued at $203. Near Lethbridge, an even group of medium- to larger-frame black heifers with medium butter levels averaging 685 lbs. was quoted at $185.

— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and 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.

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Alberta fed cattle prices and wholesale beef values were under pressure; however, feedlot operators were extremely tenacious. Buyers capriciously worked orders throughout the week and by the Friday, quality 850-lb. steers were readily trading into the Lethbridge area at $200. There was a strain on every nerve as feedlots changed limits on buying instructions which eventually changed into “just get ’em” types of orders. This was the first week of the season that Lethbridge-area feedlots stepped forward in full force. This gave the market a new set of lungs in a marathon that’s just begun. Although the larger operators focused on local cattle, this firmer tone is expected to spill over into other areas of Western Canada in subsequent weeks.

Larger-frame, medium- to lower-flesh black steers weighing around 930 lbs. sold for $194 in southern Alberta while similar-quality 850-pounders reached up to $202. In central Alberta, the market was a bit softer with medium-frame, medium-flesh Simmental-cross mixed steers averaging 950 lbs. sold for $181. There were some Charolais-cross larger-frame lower-flesh steers just under 800 lbs. that traded for $211 landed in central Alberta feedlot. Auction markets in Saskatchewan and Manitoba had fewer numbers on offer and the market wasn’t as defined in these provinces.

Markets for calves were once again quite variable. Major buyers are not paying attention to these lighter weight categories. Some decent-quality calves traded for very competitive values to the yearlings. Larger-frame mixed tan steer calves averaging 675 lbs. were quoted at $215 in southeast Saskatchewan.

— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and 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.

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Most auction markets had limited numbers on offer, with many sales barns in summer mode. However, the market faded throughout the week as feedlot operators started to factor in a worst-case scenario six months forward. Wide price ranges were reported on shorter-keep cattle. In central Alberta, mixed steers with no special feature averaging about 850 lbs. were trading from $181 to $187 while in Manitoba, similar-weight featureless steers were in the range of $189-$195. It’s difficult to explain every sale but this variability is also a sign of an extremely vulnerable market. The quality of cattle on offer was relatively poor this week, which contributed to the weaker tone. It’s always better to sell late stragglers when the market is hot, rather than when there are limited cattle on offer.

Mid-weight feeders and calves were also under pressure. Feedlot operators were on the sidelines and the farmer-cattle producer shopping for grassers experienced limited competition. Mixed Angus-based steers averaging just under 700 lbs. were quoted at $228 in southern Alberta; mixed heifers averaging 600 lbs. were reported at $195. Calves that were under 600 lbs. tended to hold value with week-ago levels on quality packages.

The tide has turned and feedlots realize the buying power has shifted. Alberta steer carcass weights jumped from 818 lbs. on June 3 to 831 lbs. on June 10. Packers are buying cattle for early July delivery and market-ready supplies are increasing each week on both sides of the border. Feeding margins are expected to come under pressure in the deferred positions. Buyers are now acting like a scared rabbit on replacement purchases with the fall of 2016 fresh in their minds.

— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and 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.

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Healthy feedlot margins are the main force driving feeder cattle prices higher. Feedlots will be selling summer place yearlings over the next month; these major operations have a fresh round of equitable gains under their belt and this is usually when we see a significant move in the feeder cattle complex. Feeder cattle prices in the 800-pound-plus category appeared to stagnate late in November and December, but we could now see these heavier placements percolate higher in line with the lighter-weight cattle.

Outside influences will continue to temper the upside potential. There is a fair amount of uncertainty how weaker cruder oil prices will effect the overall economy at a time when food spending generally slows down during the first two months of the year. In any case, producers have become more vigilant with price protection or hedging strategies, which has enhanced confidence at the higher levels. I’m forecasting stronger barley prices later in winter, while the corn market has potential to move higher once upcoming acreage is more certain.

Most auction markets will host their first major sales of 2015 this week. The feeder market is functioning to encourage expansion while at the same time ration demand through higher prices. Bred cow and heifer values are slowly percolating higher, reflecting the expansion, but there is no signal that beef consumption is slowing down.
Wholesale beef prices rebounded in late December and all eyes will be watching retail movement and restaurant traffic moving forward to confirm the price structure for fed and feeder cattle.

– 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 gklassen7@hotmail.com for questions or comments.

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