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COUNTRY LIFE IN BC • JUNE 2017 Volatile beef market raises questions, few answers


Spring prices higher than predicted, but will they stick?


It has been a fast and furious month in cattle markets to say the least. We have seen record volumes in


Markets by AARON CANART


the futures markets, providing evidence of a sharp change in market sentiment. It appears that the first half


of the year has shown there is much more beef demand than what was anticipated and much shorter numbers than even the experts estimated. This was driven by a challenging winter throughout much of the US and a delay in calf and feeder sales last fall when the market was poor. This created a situation where the volume of market-ready fat cattle was very tight through the first


five months of 2017. This tight supply and


better-than-anticipated demand resulted in much higher prices and made the cattle feeder very profitable. This should equate to better feeder and calf prices throughout the 2017 calendar year as feeders


will bid the profit back into their next turn of inventory. This has also changed the


market in a short timeframe. The optimism in the market could have gone higher but now there’s a greater possibility of more downside risk since the market has increased in value by $200 to $300 per head. This increase in value has not only come from a sharp appreciation in the cattle market in the US, but also a weaker Canadian dollar. These two factors have been tremendously positive for cow/calf operators in


Cattle started moving to summer range in May. TRUDY SCHWEB PHOTO


Western Canada. As of the date of writing


this article (May 9), the market has significantly gyrated up


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and down on huge volumes. In fact, there has not been a time in most traders’ memories they could recall such volatility. The futures market appears to not like being at the levels recently experienced – above $160 – in the feeder cattle. It is really a tale of two stories with the up-front market being supported by good beef demand and a shortage of available slaughter cattle. On the other hand, the


prospect of more market- ready cattle being available later in the year will put pressure on demand. There still exists many uncertainties about feeder and calf prices coming into the fall, and at higher prices than we thought a month ago. I would still suggest basing


marketing decisions on profit and loss. One shouldn’t get caught up in the notion there is no ceiling to the market. This thought has been premature up till now, as not many anticipated we could go this high, but levels now make any further increase in value much more unlikely.


Numbers tell the story What a difference a year


makes. Volumes through BC Livestock’s yards in May were up significantly over the same time last year – and ranchers were being rewarded for bringing their cattle to town. In Kamloops on May 16,


Elkink Ranch sold a pen of 709 lb. Angus cross steers to $224.00; last May, 700-799 weight steer calves sold to $190.00. Their pen of 728 heifers sold well at $186.00. Mann Creek Ranch sold 826 lb steers to 195.50 while their 823 lb. heifers hit $188.50. In Okanagan Falls on May 15, 713 lb replacement quality Black Angus heifers from Carl Sidwell sold to $192.75. Cow/calf pairs are trading


well. Fred Philips sold “young, good” pairs at $2,425.00 in Kamloops, while on May 12 in Vanderhoof, Red Angus cross pairs sold for $2,700.00. Little guys are trading well


above last year, too. Ian and Brenda Jones saw their 447 lb steer calf sell at $270.00. Last May, 400-499 lb steers were topping out at $225.00. With files from Cathy Glover


BCHA President John Lewis 250-218-2537


BCHA Secretary Janice Tapp 250-699-6466


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