Positive fundamentals driving cattle prices higher

Increased beef production in Canada will pay off in 2022

 

By Jerry Klassen, Columnist, Grainews (Canada)

July 15, 2021

 

Alberta fed cattle prices were quoted at $164-$165 f.o.b. the feedlot during the third week of June, up from the range $158-$162 during the second week of May. The market has been quite firm due to tighter supplies of market-ready cattle on both sides of the border.

 

At the same time, the reopening of economies and favourable weather has enhanced beef consumption. U.S. air and land travel are increasing. Employment numbers are improving, albeit slower than anticipated. Feeding margins have been floating in positive territory over the past month for Alberta feedlots which booked their barley requirements earlier in spring. The favourable margin structure has contributed to stronger feeder cattle prices.

 

As of mid-June 2021, Simmental-based steers weighing 900 pounds were quoted at $190 in central Alberta, while Charolais-based heifers averaging 850 pounds were valued at $184. The April 2022 live cattle futures reached up to $138 in mid-June, the highest price in four years. We’re seeing contraction in the U.S. cattle herd for the third year in a row.

 

U.S. cattle on feed inventories in 1,000-head-plus feedlots were running five per cent above year-ago levels during the spring. Cattle on feed reports can be deceiving...

 

Beef demand expected to increase ...

 

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