This guest post is written by Brian Perillat, Canfax Manager/Senior Analyst. Visit www.canfax.ca 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.
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