This guest post written by Brian Perillat, Canfax Manager/Senior Analyst, originally appeared in the September 25, 2015 issue of the Canfax Weekly Market Outlook and Analysis (available to Canfax subscribers). It is reprinted with permission.
As we head into the fall run, producers are looking at different marketing scenarios for their calves. While many producers have already taken advantage of high prices by selling calves for forward delivery, a significant portion of the 2015 calf crop will be marketed over the next two months. While calf prices remain well above a year ago, they have been under pressure for most of September.
The reality has been that highly profitable feedlots and a lower Canadian dollar had propped up local calf prices while the US cash market and futures market have been projecting lower cattle prices for the past few months. While calf prices seasonally drop into October and November, retaining ownership decisions should not be about trying to recover losses or hoping for better prices, but deciding whether it is projected to be profitable to feed your calves versus selling them.
Retained ownership decisions need to be based on current calf prices, cost of gain, and Continue reading