In the cow and bull trade in Northern Alberta on Friday.

US Trade

In the U.S. Monday is typically quiet. Early asking prices are around $95.00-96.00 in the south and $150.00-152.00 in the north. Business is not expected to develop until later in the week.

The Canadian dollar at 8:30 this morning was trading at 97.65, up 0.45.

Chicago Mercantile Exchange

On the Chicago Mercantile Exchange, in midsession trade, live cattle futures are as follows:

Replacement Trade

Information provided on this report is supplied by various auction markets throughout Alberta. In reference to the following prices, producers are reminded to check with individual markets on current prices and trends. Prices quoted include top quality cattle only.

Feeder and stocker prices in Northern Alberta on Friday:

Steers	Heifers
900+	87.00-97.00	84.00-93.00
800-900	94.00-100.00	88.00-94.00
700-800	96.00-110.00	88.00-100.00
600-700	97.00-112.00	91.00-101.00
500-600	104.00-114.00	95.00-104.00
400-500	107.00-116.00	98.00-111.00
300-400	107.00-117.00	87.00-110.00

Bred Cows	Bred Heifers	Cow/Calf Pairs
500.00-700.00	n/a	700.00-1220.00

All information sourced from Statistics Canada, Alberta Agriculture and CanFax

Canfax Weekly Article

Corn futures have shot up in the past two weeks from speculative changes in supply due to the wet weather in the US corn areas of the Mid-West (see MSNBC article). This region is a critical corn area growing of the US corn crop annually. The planting acres came in this spring at 10% lower than last year and the recent rains may drive that number down to less than the previous forecast. With ethanol production already creating higher demand on corn stocks, the recent rain has driven July corn futures from $6 to $7 a bushel in 2 weeks. This will have a dramatic effect on the cost of gain for feedlots feeding corn and other cereal grain crops as Barley now at $257 a tonne has followed the corn futures price it will also have an impact on the cost of gain in Western Canadian feedlots. This will add fuel to the fire facing the fed cattle industry as the cost of gain has held profits at a negative level for the past 10months on fed cattle. Higher fuel costs have also added to the higher variable costs to feedlots and cow calf producers and the higher grain costs will drive up feed costs and other farm inputs. Inevitably the higher input costs will have to be offset higher retail beef prices or negative margins will seriously erode equity in the beef sector. The whammy for the cattle sector is that compared to our poultry producers and swine producers, beef feed conversions are much higher and it has a dramatic effect on the input costs as compared to poultry and swine which have feed conversion rates at about ¼ and ½ of the feed conversion of cattle. So for every lb of beef produced on a high ration diet the conversion cost will be 4 times higher than poultry and 2 times higher than swine cost of gain. This will put beef under tremendous pressure as the meat of choice by consumers at retail outlets to compete at a price that works back through the supply chain at a break-even.

• © 2005 CANFAX a Division of the Canadian Cattlemen’s Association. All rights reserved. No part of this publication may be reproduced in any form, or by any means whatsoever, without acknowledging that CANFAX was the author of the publication and is the owner of the copyright. For further information contact CANFAX at (403) 275-5110.

• For over 30 years, CanFax has provided expert analysis of markets and trends in the ever changing North American beef industry.