Drought, options to sell, among factors for early calf and yearling movement to auction

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Drought this year has been a leading news item for several months. A run-up in cattle sales seem to be uncharacteristically large in volume for the time of year, but are there factors other than drought that are driving producers to forward sell?

“The drought really forced the issue this year and I think that combined with a general movement to direct sales and online sales has us extremely busy. We haven’t had a sale under 6,000 head on a Friday since the spring. Our volumes are like nothing we’ve ever seen before,” says Jason Danard, of Calgary Stockyards.

Danard says that there are other factors that are driving sales, but the drought is definitely a major part of it.

The ability and options to forward sell calves are more prevalent. Calves that are priced early are the highest, says Danard, and producers are becoming more and more aware of that.

The yearling volume is a completely different story — the drought has yearlings moving much earlier than typical — but producers again are exercising their options to sell, says Danard.

“For most producers this year there was profit in the cattle and combine that with the fact the there’s been a drought, grain’s high, cost of gain is really high, all these factors made it pretty appealing for producers to get their calves or their yearlings priced ahead of time,” says Danard.

Even for dry lot cattle, in late June or early July, Danard says Calgary Stockyards was seeing a lot of dry lot yearlings trade, because there was profit in them.

With increase in supply at this point of the year, Danard says that feedyards are sympathetic to the fact that producers are out of grass, there’s no place for cattle to go.

“I would suggest that industry is really working along well, this has certainly been challenging, and in general we’re getting through it,” he adds.

Hear more from Danard, in this interview with RealAg Radio host Shaun Haney:

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