Western Canadian feeder cattle prices continue to trade in a mixed volatile pattern. A Pfizer Gold age-verified group of Charolais-cross steers averaging 520 pounds sold for $162 per hundredweight in central Alberta. Run-of-the-mill Simmental-cross steers averaging 510 lbs. sold for $151/cwt in the same region.
The market is starting to reflect sharper discounts for lower-quality cattle. Heavier replacements came under pressure due to weakness in the slaughter market. Exotic steers averaging 870 lbs. sold for $142 in southern Alberta, down $2/cwt from a week earlier. Good-quality bred heifers are selling in the range of $1,200-$1,400. Many cow-calf producers are holding back on heifers, resulting in lower supplies in the feeder cattle pool.
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The U.S. Department of Agriculture’s cattle on feed report had October placements down one per cent in comparison to October 2010. The trend for lower placements is expected to continue throughout the first half of 2012. August 2012 feeder cattle futures made record highs last week, trading over $153.
Wintry-type conditions may temper buying enthusiasm in the short term but available supplies are starting to decline. Look for feeder prices to consolidate through December and January. The market could strengthen $4-$8 through February and March as fed cattle prices move through seasonal highs.
— 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] or at 204-287-8268 for questions or comments.
