Western Canada's Feedlot Margins Suffer Due to Low Live Cattle Prices

Feedlot margins in Western Canada have been negatively impacted due to lower prices for live cattle. The current value of deferred live cattle futures suggests that feedlot margins may remain underwater for an extended period.

The western Canadian feeder cattle market has been trading steady to $10 lower on average compared to the previous week, with some sales even experiencing losses. The barley market is expected to rally over the winter, and stronger feed grain prices are also weighing on the feeder complex.

However, there were some positive notes from recent sales in Western Canada. At the VJV sale in Ponoka, a group of 25 Charolais-based yearling steers sold for $437/cwt, while another group of mixed steers off grass with processing records sold for $486/cwt.

Statistics Canada's cattle inventory report showed that the industry is in the early stages of expansion. However, this is happening at the top of the market, and beef demand is expected to be lower in 2027 due to slower economic growth in both Canada and the U.S.