Bought-ahead packers and rising carcass weights here at home were two of the negative factors weighing on the fed market as we moved into fall. The unknowns are the Canadian dollar and where demand is headed as consumers look to fall type cuts like roasts and stewing meats. Positives in the fed market include lower carcass weights in the U. S. which has reduced the tonnage in the U. S. pipeline and created the potential for export sales, as well as the smaller number of cattle on feed in North America this fall.
Feed grain prices rallied on both sides of the border through the summer leading to concerns over feed costs for fall, however that should be offset by the unfavourably wet conditions as harvest got underway across many parts of the Prairies which should result in ample supplies of feed grain becoming available. Forage supplies are also adequate which supports lightweight steer and heifer prices.
Smaller North American cow inventories and a reduced 2010 calf crop also support fall-run prices as buyers compete to fill pens.
Look for prices to come under pressure as feeder volumes increase. However demand locally and in the U. S. where the 2010 calf crop is estimated to be the smallest since 1950 may keep prices supported.
As always, any positive move in the Canadian dollar will negatively affect the calf market. Sellers and buyers should attempt to take advantage of swings in the currency.
A recovering economy and uncertain consumer spending continues to support trim and grinding products. The higher prices will continue to bring cows to town. As weaning gets underway and culling decisions are made volumes will increase and some seasonal decline in prices will occur, but it should be a milder drop than we have seen in other years.