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Market Watch - January 18, 2006 | |
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From the Jan 18, 2006 Issue of AgriProfit$ | |
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| | The Central Alberta pricing chart shows that feeder prices were well above historic prices since July 2005 when the border re-opened to Canadian exports of under thirty month cattle. In 2005, exports of feeder cattle to the US were just over 200,000 head. This pace of exports should continue if Canadian feeders are discounted significantly compared to US feeders. Any narrowing of the spread between US and Canadian feeder cattle should result in less US buyer interest here, and less movement of feeders south.
Source: Canfax (ave of midpoint of the range); Economics and Competiveness Division, AAFRD
In the first week in January, the average price for central Alberta 8-900 lb feeders was about $1.18/lb. Last week this price was unchanged. Feeder sales volume for the week of January 13 was almost 25,000 head. This is about four times the volume of the previous week.
Feeder volumes should increase for the rest of January and into February as the backgrounded calves come to market, putting some pressure on prices. This pressure will be particularly evident on the heavier types projected to finish in the summer period when prices for fed cattle are at seasonal lows.
On the feed grain pricing front, the provisional duty on corn imports from the US imposed by Canada could pressure feed grain costs. However, with the abundant supply of feed barley and wheat, the impact in Alberta could be minimal. The impact will be further marginalized if the Canadian Border Services Agency follows through on proposed exemptions to the duty for corn importers on the livestock/meat they export to the US.
Another factor to watch is the Canada-US exchange rate. The average exchange rate in 2004 was almost 77 cents and in 2005 it was about 84 cents. An increase in the Canadian dollar results in a decline in cattle prices.
Diane McCann-Hiltz
Provincial Livestock Market Analyst
780-422-6081 |
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For more information about the content of this document, contact Dale Kaliel.
This document is maintained by Gail Atkinson.
This information published to the web on January 18, 2006.
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