Feeder cattle market holds value despite weaker futures

For the week ending July 18, western Canadian feeder cattle prices were relatively unchanged compared to seven days earlier.

Limited numbers were on offer, which made the market hard to define.

Larger groups of quality genetics were well bid. Smaller packages and singles were heavily discounted.

Major markets in the United States appeared to trade US$5-$10 per hundredweight lower than the previous week, and feeder cattle futures were down $8-$9 per cwt.

A cattle producer reported that a group of 60 mixed steers off grass averaging 1,060 pounds sold for $454 per cwt. f.o.b. ranch near Humboldt, Sask.

At the Perlich sale near Lethbridge, 70 Black Angus steers with lighter flesh off grass averaging 938 lb. sold for $512.

At the Ponoka, Alta., sale, a dozen black steers averaging 952 lb. on backgrounding ration with full processing records exited the ring at $445 per cwt. At the same sale, a group of six Shorthorn cross heifers evaluated at 883 lb. with processing records coming off grass and corn silage sold for $450 per cwt.

In Westlock, Alta., a smaller package of Simmental cross Charolais, weaned heifers with full processing data coming off grass weighing 700 lb. sold for $545 per cwt.

North of Calgary, a producer reported that a handful of larger frame, medium flesh Simmental-based steers weighing 705 lb. were valued at $615 per cwt.

For October delivery, the TEAM market report had 120 Simmental Angus cross steers averaging 500 lb. with full veterinary records (including implants) coming off a diet of cows and pasture that sold for $789 per cwt. f.o.b. ranch near Fort Macleod, Alta.

Alberta packers were buying fed cattle on a dressed basis in the range of $565-$575 per cwt., down $15-$17 per cwt. from the first week of July.

Packers appear to have their nearby requirements covered. Delivery dates on the sales were scheduled a month forward.

On July 17, wholesale Choice beef was quoted at $368 per cwt., down $12 per cwt. from seven days earlier.

Select product was valued at $355 per cwt., down $7 per cwt. from July 10.

Beef demand appears to be softer than earlier anticipated. This has caused the Canadian and U.S. packers to curtail the slaughter pace.

The February 2027 live cattle futures reflect an Alberta fed cattle price of $306 per cwt. for January and February 2027. The break-even fed cattle price for replacements bought over the past couple of weeks is around $360 per cwt. for that timeframe.

As it looks now, Alberta feedlot margins will be negative $400-$600 per head during the first quarter of 2027. Feeder cattle are currently overvalued. This should encourage cattle producers to market yearlings and calves.