Canada feedlot closure seen hurting prices, sending cattle to U.S.

Thu Sep 22, 2016 3:15pm EDT
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By Rod Nickel

WINNIPEG, Manitoba, Sept 22 (Reuters) - The closure of one of Canada's biggest cattle feedlots is likely to depress prices of young cattle and the grains used to fatten them, and may increase sales to the United States, industry officials say.

Alberta-based Western Feedlots said on Wednesday that it will shut feeding operations early in 2017, citing poor market conditions and unfavorable economic factors in the province.

"The market we're in now can't get much more depressed," said Martin Zuidhof, chairman of Alberta Cattle Feeders' Association, a rancher who also runs a feedlot.

The price of young cattle is likely to face pressure, and if it leads to fewer cattle raised in the province, could jeopardize profits in the packing industry, he said.

The price of slaughter-weight cattle has dropped 30 percent from a year ago.

Alberta's two biggest beef packers, Cargill Ltd and JBS USA Holdings Inc, declined to comment.

Barley and wheat are fed to cattle to fatten them for slaughter, and Western's closure may also weigh on prices of those grains if feeder cattle numbers dip, Zuidhof said.

Canada is the world's sixth-largest beef exporter, and Alberta raises more cattle than any other province.   Continued...