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Deb’s Outlook – for Sep. 12, 2011

Fed Outlook

Fundamentally the fed cattle supply ahead in Canada is supportive to the fall market but U.S. supplies will pick up toward the end of the year. Beef consumption increases as the weather cools and families adapt to school schedules right up to the Christmas holidays. A premium board, weakness in the Canadian dollar, increases in seasonal demand and smaller supplies all point to a stronger market in Canada. Factors to watch include instability in world markets and concerns over economic conditions among our trading partners.

Feeder Cattle Outlook

Good grass conditions will spread out the higher volumes during the fall run. However, anticipated strength in the yearling market will likely cause some backgrounder/ grass operators to bring yearlings to town ahead of grass shortages. Strong demand is expected in the feeder market through the fall based on the smaller calf crop, plenty of available forage and a friendly fed market. One factor to keep an eye on is the cost of gain particularly as the USDA last month announced a reduction in previous corn crop estimates.

Non-Fed Cattle

The cow market has a strong seasonal trend with an increase in numbers in the fourth quarter as producers wean and make culling decisions. However, with good calf prices and ample hay in most areas some producers may choose to keep their mature cows for another year which in turn will tighten available supplies even as the bulk of the cows come to town. Demand remains high for non-fed beef and that will support prices at levels similar or stronger than last year.

About the author

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Debbie McMillin is a market analyst who ranches at Hanna, Alta.

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