Calf Prices and Retained Ownership

This guest post is written by Brian Perillat, Canfax Manager/Senior Analyst. Visit to subscribe to regular analysis of markets and trends.

As the fall run is starting, producers are having to re-adjust their price expectations when marketing calves.  Marketing decisions were relatively straight forward the last couple years for producers when they were selling calves at record high profit levels.  Given the major price correction, producers are taking a harder look at different marketing/feeding options for this year’s calf crop.  At the beginning of October, 550 lb steers are about $100/cwt lower than a year ago, and $85/cwt lower than 2014.  On the other hand, they are about $25/cwt higher than 2013.

alberta 500 600lb steer price cwt 2000 to 2016

Disappointing prices and a general abundance of feed has producers considering retained ownership.  After such a major price correction, this may seem reasonable to explore, but it is important understand what the market signals are, understand the risk involved, and have a strategy to manage risk.

It is also important to Continue reading

Retained ownership

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

Retained ownership and feeder basis

Editor’s note: Markets appear favorable for retained ownership of calves this year. By retaining ownership, producers can reap the benefits of a genetic selection program and other investments made in calves, such as the use of low-stress weaning techniques. Risk management is advised to producers that retain ownership.

Read on for details of the economics in an article written by Brian Perillat, Canfax Manager/Senior Analyst, which originally appeared in the October 4, 2013 issue of the Canfax Weekly Market Outlook and Analysis (available to Canfax subscribers). It is reprinted with permission.

Although calf and feeder prices have been quite strong so far this fall, generally $5-$15/cwt stronger than a year ago, a bullish tone in the cattle futures markets and a bearish tone in the feed market has producers looking at the opportunity to background or retain ownership of their calves. Continue reading