Compared to last week, replacement cattle over 800 lbs. traded $10-$15 higher; some quality packages were up $20 from week-ago levels. Feeder cattle weighing 600-800 lbs. traded $4-$8 higher; calves under 600 lbs. were up $6-$10 on average, with some packages in Alberta up as much as $15 from last week.
Strength in the fed cattle market has rejuvenated buying interest from major feedlots in central and southern Alberta. During the first week of November, fed cattle in the U.S. southern Plains were trading at US$130 on a live basis. Thirty days later, prices in Kansas were in the range of US$140-$142. On top of this, the Canadian dollar has depreciated by about 2.3 per cent. We haven’t seen the same gains from Alberta packers because there is a backlog of market-ready cattle in Western Canada; however, fed cattle export volumes have increased over the past couple of weeks. The feeder market in Alberta is now premium to the eastern Prairie regions in most cases.
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In central Alberta, larger-frame mixed steers with medium flesh levels on full health program averaging 855 lbs. were quoted at $190; similar-quality heifers averaging 860 lbs. were valued at $172 in the same region. Near Lethbridge, black mixed steers weighing a shade over 1,000 lbs. were valued at $188 landed in the feedlot and heifers weighing 945 lbs. were quoted at $167.
North of Brandon, medium-flesh Simmental-blended steers averaging 764 lbs. dropped the gavel at $194 and Charolais-based heifers weighing 780 lbs. were quoted at $160. A smaller group of Charolais steers weighing 510 lbs. reached up to $242 in the same region.
In central Saskatchewan, a smaller group of mixed steers weighing 650 lbs. were quoted at $190 and tan heifers averaging 650 lbs. were valued at $179. Southeast of Calgary, black steers with a 525-lb. frame were quoted at $228 and red heifers averaging 522 lbs. were reported at $194.
The market is in a situation where underlying currents are causing prices to percolate or heat up in certain areas. The U.S. feeder market is leading the Canadian market higher and we’re anticipating a surge in feeder cattle exports to the U.S. during the first quarter of 2022. At the same time, La Nina conditions tend to result in cooler and wetter June, July and August on the Canadian Prairies. Grass cattle are expected to trade at fresh 52-week highs later in February and March.
— 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.
