Calf prices likely to slip this fall

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Published: June 27, 2002

EDMONTON – The crystal ball may still be cloudy on calf prices this

fall, but it’s clear they will be lower than last year.

It’s unlikely 2001’s record high calf prices will be repeated this

fall, said Anne Dunford, Canfax senior market analyst.

“It’s still not going to equate to the numbers we were seeing a year

ago,” said Dunford during the Alberta Cattle Commission semi-annual

meeting.

Herb Lock of Farm Sense Marketing said $1.15-$1.25 per pound would look

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like a good price for early run, lightweight calves, about 35-40 cents

below last year’s prices.

“We’re used to some pretty outrageous prices,” said Lock.

If producers hedged 600 pound cattle on the Chicago futures today for

Sept. 1 delivery, they’d bring $1.25 per lb. compared to $1.58 one year

ago. Lighter 500 lb. calves hedged at Chicago will bring $1.20.

The lower prices might not look enticing now but they’ll look good this

fall, he said.

Lower prices this fall will be caused by lighter calves. Lock estimates

calves will be 50 to 100 lb. lighter because of a feed shortage. The

lower weights, coupled with prices 25-40 cents lower per lb., will hit

cow-calf producers hard.

A feed shortage could mean more open cows come back from pasture and

end up in the feed market, adding to supply, he said.

Neil Blue, an Alberta Agriculture market specialist, said a lot of

variables such as the weather and possible shortages of feed and forage

will have a big impact on the fall calf price.

“It’s so early in the growing season,” said Blue.

Rain in southern Alberta has perked up pastures, but if dry conditions

continue in central and northern Alberta, a lot of cereal crops could

turn into feed grain.

Dunford said higher barley prices usually force calf prices down, but

last year was an exception with high barley prices and high calf prices.

“One of the things we saw really interesting last year was the fact the

relationship between feed grain prices and feeder or calf prices got

out of line,” said Dunford. She expects a return to the traditional

lower feeder cattle prices that come with higher barley prices.

Feedlot owners suffering from a year of deep losses will likely not be

able to pay high calf prices again this year and will stick to a strict

buying price schedule, she said.

Lock said it’s still possible for producers to get a good price for

calves, but they have to watch the market closely to lock in a good

price when they find it.

“They have to stay tuned.”

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