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Cattle prices drop by nearly half from last year

Click to play video 'Cattle prices drop nearly half from this time last year' Cattle prices drop nearly half from this time last year
WATCH ABOVE: The low price of cattle continues to take a toll on ranchers. Just last week Western Feedlots, one of Canada’s largest cattle feeders, announced it was closing up shop. As Quinn Campbell reports, producers are losing hundreds of dollars per animal for cattle they purchased high, fed all winter and now are selling low – Sep 27, 2016

The low price of cattle continues to take a toll on Alberta ranchers.

Just last week, Western Feedlots, one of Canada’a largest cattle feeders, announced it was closing up shop.

READ MORE: Alberta’s Western Feedlots to wind down cattle operations

Producers are losing hundreds of dollars per animal for cattle they purchased high, fed all winter and now are selling low.

At Balog Auctions annual video livestock sale, 6,600 calves went through the ring.

Buyers and sellers were keeping an eye on the price, watching just how far it’s fallen from last year.

“In a four-year time period we’ve seen prices double for cattle. Unfortunately since the middle of June we have now seen prices drop off quite dramatically, so calf prices, most cattle prices, drop 35 to 40 per cent in the last year,” Brian Perillat, the senior manager and analyst with Canfax, said.

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READ MORE: Farmers are getting less for beef cattle, but you’re paying the same for steak. Here’s why

That’s not the news producers like Curtis Snethun and his wife want to hear. They are waiting and wondering how low it can go.

“I’m sure lots of people are concerned, but I mean we came off a two year high, three year high even, so I mean what rises must fall. It’s just a matter of finding the bottom to see where it’s going to go from here.”

But that bottom could be a ways off. Perillat said the volatile futures market has hit all facets of the cattle industry.

“A lot of the signals still point to generally lower calf prices. The feedlots have lost a lot of money in this last year. The only way for the feedlots to get their margins in line is to pay less for calves.”

The loss on a single steer over one year has been dramatic. A 550-pound steer calf sold for just over $3 a pound, bringing an average of about $1,700.

That same steer selling now is bringing just below $2 a pound, averaging about $1,000 a head. Producers are getting $700 less per animal this year alone.

One thing cattle producers have going for them is the low Canadian dollar. There’s roughly 3.8 million cows in Canada and Perillat said 800,000 to one million of them go south of the border every year.

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“Every time the dollar goes down one cent, you could add almost four to five cents to the price of calves, so if the dollar was to go down to 73 cents, you could probably almost bump calf prices up 14 or 15 cents.”

For Snethun, he isn’t letting the rocky market get to him, he will plan for the worst and hope for the best.

“You have to watch your budget, and it will be what it will be.”