Western Canadian feeder cattle prices were $2-$4 per hundredweight higher last week. Relatively low volumes continue to characterize the feeder market but buying enthusiasm has strengthened relative to the number of feeder cattle available. Pasture conditions remain favourable in most regions, which has delayed the early yearling run.
Beef demand appears to be improving and stronger fed cattle prices pulled feeders higher. Wholesale beef prices have rebounded off the lows due to Labour Day preparation and late summer retail specials.
Alberta packers bought fed cattle in the range of $111-$113.50/cwt, up a solid $2 from last week. Steers in the range of 700 to 800 pounds sold for $141/cwt in central Alberta. Southern Alberta markets had top-quality steers weighing 800 to 900 lbs. from $130 to $137/cwt. The market appears to be ill-defined given the lower number of cattle available at this time with no feature groups on offer.
The U.S. Department of Agriculture increased fourth quarter beef production due to larger-than-expected placements in the summer months. However, there is a fair amount of uncertainty moving forward regarding carcass weights during the winter period. Historically high corn and wheat prices may result in lower carcass weights and cause production to drop from current forecasts.
Outside influences appear to be supporting fed and feeder cattle prices. The Dow Jones industrial average (DJIA) closed at the highest levels since May 2 and crude oil futures are $12 off the summer lows. Commodity prices in general have experienced a strong rally since late June and cattle prices are starting to move in line with the general economy. Consumer spending, which composes 70 per cent of the U.S. economy, is the largest influence on beef demand.
— 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] for questions or comments.