Klassen: Feedlot margins will determine feeder prices

There have been no Western Canadian feeder cattle gross sales for week ending December 27. The shortened vacation week is all the time a time for cattle producers to name in and talk about components that may affect the feeder market over the following couple months. Within the short-term, ending feedlot margins are the primary issue driving the feeder market.

Alberta packers had been shopping for fed cattle on reside foundation at $294/cwt on December 22, unchanged from the earlier week. Breakeven pen closeout values for December are round $306/cwt. Alberta feeding margins have slipped into damaging territory after beneficial returns in the course of the summer time and fall of 2025.

It’s necessary to comprehend that the breakeven fed cattle value for April 2026 is within the vary of $352-$355/cwt. Fed cattle costs must rally by almost $60/cwt from present ranges for feedlots to expertise constructive margins within the spring timeframe.

Feedlot margins can have a big affect on feeder cattle costs shifting ahead. Throughout the second week of October 2025, bigger body greater high quality steers averaging 900 kilos in Central Alberta had been buying and selling at $500-510/cwt.

Throughout the first half of December 2025, greater high quality 900-pound steers had been valued from $455-$465/cwt. Calves have additionally come beneath stress. In mid October, 600-pound tan steers had been priced at $650/cwt in Central Alberta. Throughout the week ending December 13, Charolais steers weighing 600 kilos had been valued at $595/cwt.

Feed barley costs are additionally anticipated to strengthen over the winter. The year-over-year improve in feed barley exports will lead to decrease provides later within the crop yr.

Lastly, we’ve a bullish outlook for the Canadian dollar. The Canadian economy has carried out higher than anticipated within the latter half of 2025. Canada’s commerce steadiness has additionally changed into a surplus after operating excessive deficits within the first half of 2025. This naturally ends in extra demand for Canadian {dollars}. Feedlot margins might be affect by greater barley costs and a stronger change price shifting ahead.

It seems that feedlot operators have lowered their bids for alternative cattle as a consequence of margin uncertainty. Cow-calf producers and backgrounding operators must pay shut consideration the the ending feedlot margin construction. We’ve seen how delicate the feeder market might be when feeding margins transfer into damaging territory.

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