Calf prices take sting off drought

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Published: September 7, 2000

When southern Alberta rancher Phil Smith had to sell his calves early because of the drought, he had one consolation.

For the second year in a row, calf prices have reached record highs.

Some calves sold for up to $2.45 a pound during a recent Canadian Satellite Livestock Auction.

Smith received $1.86 to $2 per lb. for his mix of 100 heifers and steers during the satellite sale.

“We’ve never seen that kind of return for our calves. We’re quite happy to get that,” said Smith, of Cardston.

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Smith usually sells calves in October but shortage of pasture forced an earlier sale. The calves, though lighter than usual, brought higher prices than he’s had in the past.

Larry Penner of Barons, who also sold his calves because of drought, said the prices take the sting out of the feed bill. He received an average $1.80 for his calves, which weighed 512 lb. on average.

“The price is fantastic. I’m always happy with $600 per calf. This year I got $900. That’s really a big, big difference.”

Anne Dunford, market analyst for Canfax, said prices show no signs of dropping..

A combination of optimism in the beef industry, more feedlots and empty feedlot space will keep prices at high levels. At the beginning of the month about half the 1.5 million spaces in cattle feedlots in Alberta and Saskatchewan were empty.

Last year, the average price in August for 500-600 lb. calves was $1.32 per lb., and 850-lb. steers sold for $1.09 per lb.

This August, the average price for 500-600 lb. calves was $1.65 per lb., and the price for 850-lb. calves was $1.30.

“Even if you take a dime off the calf prices, they are still well over record levels,” said Dunford.

Brant Hurlburt, partner in the Canadian Satellite Livestock Auction and owner of Fort Macleod Auction Market, said it will take time for people to adjust to the new prices. If the price is still high this fall, people will begin to accept the higher prices as normal.

He said feedlot operators have little choice but to pay the toll.

“They need the cattle, they’ve got to fill the pens,” said Hurlburt.

Glen Thompson, a southern Alberta feedlot operator, said most feedlot operators are counting on the traditionally higher finished calf prices in February, March and April to make money feeding calves.

Thompson said he’s “picking around the edges” of the markets to find less expensive calves.

Southern Alberta cattle broker Harvey Bourassa said some of his clients are refusing to pay the high prices. Others figure if they sell right now they might still make a dollar, and some say if they don’t buy now, they’ll have a tax problem.

Until recently, feedlot operators have had record profits. Some have made up to $100 per head profit and can absorb some of the higher calf purchase prices.

“For some, their silos are full of silage, they have empty corrals and they have a tax problem. They’re going to buy cattle,” said Bourassa.

Most feedlots would rather pay the high calf prices than give the money to the government in taxes, he said.

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