Klassen: Feedlot operators become cautious on purchases

Reading Time: 2 minutes

Published: May 13, 2025

, ,

Photo: Geralyn Wichers

For the week ending May 10, Western Canadian feeder cattle markets traded steady to $5 higher on average. Quality packages of lighter calves were priced $10-$15 above week ago levels. Many auction barns are only holding sales every two or three weeks at this time of year with limited numbers on offer. This made the market hard to define in certain weight categories.

Ontario buying interest has subsided, while some operations from Alberta have also halted purchases for the time being. The feeder market is functioning to ration demand. Prices are now high enough so that feedlots are backing away from the market.

Read Also

 Photo: Canada Beef

U.S. livestock: Feeder cattle extend rally to new highs

Chicago Mercantile Exchange feeder cattle futures extended gains to record highs on Wednesday while live cattle futures set a contract high before pulling back.

At the Ponoka sale, medium to lower flesh Charolais Angus blended steers on corn silage and grain screenings diet with full processing records averaging 993 pounds traded for $379.

At the same sale, a handful of larger frame red Angus based steers weighing 882 pounds with full feeding and processing data notched the board at $401.  In central Alberta, larger frame Simmental based heifers with various flesh levels weighing a shade over 900 pounds on light grain and silage diet were valued at $370 fob farm.

In southern Alberta, wide frame lower flesh black Limousin based steers weighing 805 pounds apparently traded for $451. In the same region, Simmental cross heifers averaging 802 pounds were quoted at $405.

At the Rimbey sale, a handful of Charolais Simmental cross steers on silage and hay diet with preconditioning health with a mean weight of 743 pounds set the bar at $464. In southern Alberta, quality genetic packages of steers weighing 700 pounds were quoted from $480-$495.

In the Calgary region, a smaller package of  mixed steers weighing with a mean weight of 600 pounds traded for $560. At the Vermillion sale, there was a larger group of heifers averaging 614 pounds that traded for $536/cwt.

At the Westlock sale, a smaller package of Angus mixed heifers on silage and hay diet with full herd health records averaging just under 500 pounds sold for $570. At the same sale, a smaller package of run-of-the-mill steers evaluated at 492 pounds silenced the crowd at $599.

Alberta packers were buying fed cattle on a live basis at $292-$294/cwt fob feedlot, unchanged from last week. Current breakeven pen closeouts are in the range of $260-$265. While margins are favorable in the short term, feeders coming into the feedyards this week don’t pencil profitably.

The October live cattle futures have been hovering around $206 which is a $12 discount to the nearby U.S. cash market. If the deferred live cattle futures don’t strengthen by US$15, southern Alberta losses during October are going to be in the range of $300-$400 per head.  Needless to say there is a fair amount of risk owning replacements at the current levels.

About the author

Jerry Klassen

Contributor

Jerry Klassen analyzes cattle, feed grain and currency markets for Canadian cattle producers. To subscribe to his weekly market outlook or consulting services, contact him at 204-504-8339.

explore

Stories from our other publications