Canadian cattle producers are sitting in a favorable position going into summer.
Executive Administrator for the Manitoba Livestock Marketing Association, Rick Wright, says all indications show the Canadian market going into the early fall, especially for yearlings and the early calves, will be very strong.
“Everybody's looking into the future as to what's going to happen when the fall run hits and we think that the market is going to stay very steady to strong,” explains Wright. “There are individuals who think that there's going to be higher markets here again this fall, and we could see slightly higher markets on some of the cattle than we have right now, but we're at all-time record highs. No one in the industry thought that we were going to be anywhere close to getting this kind of money for the cattle.”
“And you know, there's a few limiting factors,” he adds. “We're still facing some drought in a number of places across Canada. So, I mean the feed grains have to stay at the current levels for the cattle market to stay at the current levels.”
Wright says one of the things that may have been overlooked over the last little while is the American market.
“You know this past week, Superior Livestock Sales had some huge sales in the US on their video and electronic markets and the calves in the U.S. especially in Montana, North Dakota, South Dakota, you know are quite a bit cheaper than what the cattle are in Canada. There are a number of feedlots that are looking towards seeing what that market's doing and if it stays with that biggest, you know, differential in the prices, and with our dollar strengthening, we could see Canadian feedlots look at bringing some of those Montana, North Dakota, South Dakota calves up into Canada to feed.”
“It wouldn't be the first time it's happened, and it won't be the last time it happens, but that could be that what caps the market,” he adds.
With our neighbors to the south of us having a lower market isn't not good for Canadian producers because it means that those calves could come north into Canadian feedlots and pastures. "And every American calf that comes north takes a spot away from a Canadian calve that should be going into that feed lot so, again, that could cap the market," adds Wright.
"But with that said, no reason to panic. We think that the Canadian market coming into the fall, especially on the yearlings and the early calves, is going to be very, very strong. All indications on the Ford Contracting Sales that have been had to this point have indicated very, very strong prices."
"So, I think I would be more worried about drought than I would be about, you know, the American market on the calves. But it's something to keep an eye on," he adds. "You know, we have to keep everything here, to maintain these prices and the feed grain prices are one of the things that we're watching very closely."
"Indications are that there's lots of corn acres and that the corn crops are doing very well to this point," continues Wright. "If that's the case, then certainly that will indicate steady to lower feed costs to feed these cattle and that will keep the price of the calves in the yielding very strong."
Wright says in regions across Canada and the U.S. are experiencing extended drought in the corn growing areas, and if this continues it will be affect market prices.
Please listen to more with Rick Wright below!