Glacier FarmMedia COVID-19 & the Farm

Klassen: Weaker barley prices support feeder market

Western Canadian feeder cattle prices continue to percolate higher in the 750-pound-plus categories while lighter weight classes were steady with week-ago levels. Feedlot buying interest appeared to be more aggressive due to softer barley prices in southern Alberta.

Earlier in May, barley traded up to $220 per tonne delivered Lethbridge but active trade materialized at $210 per tonne this last Friday. Feedlots appear to be fairly current with marketings and the ability to lock in longer-term profits stimulated the higher price structure.

Top-quality Angus-based steers weighing just over 825 lbs. sold for a whopping $196 per hundredweight (cwt) in central Alberta. Lighter weight classes have failed to move higher, despite the excellent pasture conditions across the prairies. Calves under 600 lbs. continue to sell in the range of $230-$250/cwt while 600- to 750-lb. cattle are quite variable. This may be due to lower supplies but also uncertainty in feed grain costs for the late summer and fall period. Silage prices have also ratcheted higher due to larger-than-expected consumption over the winter. This may be another factor tempering demand for lighter-weight placements. Alberta fed cattle prices were slightly lower this week as fall placed calves start to come on the market.

U.S. weekly jobless claims are now at the lowest level since 2007 and robust consumer spending has enticed demand for all beef cuts. Grilling season is now underway and restaurant traffic has surged after the bitterly long winter.

Seasonally, the fed and feeder cattle complex trends lower from May through July but the downside may be limited this year. Wholesale beef prices spurted higher last week as the slaughter pace adjusted for the holiday. Secondly, there are ideas that second-quarter beef production may finish lower than previous estimates. The economy appears to be running on all cylinders and higher disposable income for the average consumer along with tighter supplies of all meats should sustain beef and cattle prices at the current levels.

– 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.

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