Compared to last week, western Canadian yearling prices were relatively unchanged while calf prices were steady to $6 lower. Demand from Ontario buyers caused markets in Manitoba and eastern Saskatchewan to hold value. Alberta prices were under pressure as the market appears to be rationing demand. Calf prices are 25-30 per cent higher than year-ago levels and there has been significant equity erosion over the past couple years; therefore, Alberta cattle feeders are buying fewer cattle. Yearlings on forage or hay diet were very well bid. Pre-conditioned calves were also trading at a small premium over average values. Feedlots are short-staffed and operators are willing to pay up for cattle that need minimal care after processing.
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The backgrounding crowd is significantly smaller than last year and demand from the second tier was non-existent last week. Finishing feedlots were setting the price structure for calves and the market continued to incorporate a risk discount due to adverse weather. Temperatures have swung from -30 C to +10 C, and this is very hard on calves. Trucks are in short supply, which has contributed to the wide price variation within the week. In central Alberta, cow-calf producers have been struggling to secure freight to move calves off farm to auction. U.S. demand has been rather quiet over the past month. All these factors have contributed to the softer tone for calves.
South of Edmonton, a small group of late-blooming, larger-frame Simmental steers averaging 930 lbs. on forage diet were valued at $224 and similar quality heifers weighing 910 lbs. were quoted at $201. Northwest of Winnipeg, black Limousin-based steers weighing 805 lbs. silenced the crowd at $243 and red and black heifers a shade under 800 lbs. dropped the gavel at $214.
In west-central Alberta, black Angus weaned calves weighing 770 lbs. were purchased for $240; in east-central Saskatchewan, red Angus mixed weaned calves averaging 750 lbs. were bid up to $244. In southwestern Manitoba, larger-frame semi-weaned black mixed steers weighing 615 lbs. reached up to $267 and Charolais-based heifers averaging 605 lbs. were quoted at $217. Northwest of Winnipeg, a small group of Charolais-based steers weighing 570 lbs. sold for $269 and Simmental-blended heifers weighing 515 lbs. charted the board at $241.
In the Lethbridge area, tan steers weighing 525 lbs. were valued at $284 and tan mixed heifers weighing 510 lbs. notched the board at $235. In central Alberta, mixed steers that ran over the scale at 450 lbs. charted course at $296 and mixed heifers averaging 420 lbs. were recorded at $243.
Alberta packers were buying fed cattle on a dressed basis at $304-$305 delivered, which equates to a live range of $182-$183 using a 60 per cent grading. Packers are buying for delivery during the first half of January. Alberta feedlots are backed up with a large volume of market-ready fed cattle that are deep in the red.
— 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.
