U.S. fed cattle prices jumped $5 to $6 pre hundredweight (cwt) last week, reaching $129 in the northern Plains, which supported the Canadian feeder market. The Alberta slaughter market was not defined, with light volumes trading, but there was anticipation that values could jump by a similar amount next week, especially with the weaker Canadian dollar and stronger beef wholesale values.
Western Canadian feeder cattle prices were quite uneven, trading $2/cwt lower to $3/cwt higher depending on location. Softer demand was noted in the eastern Prairies while Alberta prices were generally firmer across the region.
Black Angus-cross steers weighing just over 600 pounds sold for $152/cwt in central Alberta. Simmental-cross steers weighing 800 lbs. with medium flesh sold for $124/cwt at the same sale. In southern Alberta, a small group of Charolais-cross steers weighing 850 lbs. sold for $126/cwt landed in the feedlot. Black Angus heifers weighing 800 lbs. sold for $116/cwt in southeastern Alberta. Fed cattle are expected to trade in the range of $115-$118/cwt in the summer months and the feeder market is now priced according to breakeven feeding margins.
Restaurant spending generally spikes in March, which results in a seasonal rally in cattle prices. Consumer spending came in below expectations during the first two months of the year but there are signals for increased consumption over the next couple of months. Wholesale beef values were $3/cwt higher last week, with choice product touching $185/cwt, but it's important to note this is still $13/cwt lower than last year for the same timeframe. Beef wholesale prices need to continue the advance to sustain the fed market, which would renew buying enthusiasm for replacement cattle.
Western Canada is expected to experience adverse weather this week and barley prices remain firm at $183 per tonne in southern Alberta. Look for the feeder market to trade steady to slightly higher, given the volatility in the fed market.
-- 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 firstname.lastname@example.org for questions or comments.