The cattle market is hot, and it doesn't show any signs of cooling off, says Weyburn farm management agrologist Bob Wolfe.

Wolfe was one of eight speakers at the second annual Livestock Update, held Thursday at the Elks Hall.

Around 40 producers took in the forum, which provided a day's worth of information on practical and marketing concerns regarding the livestock industry.

Wolfe, who led off the speakers with a presentation on market signals for cow-calf producers, said cattle prices are at historic highs and may not have peaked yet.

Statistics from Sask. Ag and Food over the past decade show calf prices have fluctuated in the 90s, from $1.08 per pound in 1992, to eventually bottom out in 1996 at $0.87. From that point on they began to climb, up to $1.59 per pound where they are today.

A big factor in this trend is that cattle populations have decreased, causing an increase in prices.

"Right now we've been in a depopulation phase in cow herds in North America for the last five years," said Wolfe. "As we keep our inventories down we'll probably be able to enjoy more good times."

As is the case in many agriculture markets, bad news in one area can mean prosperity in another. Wolfe said a drop in U.S. inventories is another factor in the continued boom in the cattle industry on the Prairies.

"Most analysts say because of the drought in the U.S. and, in particular, Montana, the cow herd in 2000 will substantially decrease, which for us is really good news.

Wolfe pointed out that producers don't have to increase cow herds to regain productivity as in the past.

Cow-calf producers have still not received the message to rapidly expand, he said; expansion in cow herds is not going to start with calving this fall, and many producers are still culling heifers.

The number of heifers available for breeding in Canada peaked in 1995 at 1.05 million, but quickly declined as the price dropped out on the market. Right now in Canada we're at 750,000 heifers, so producers have just started in the first leg of expansion. The cow-calf market in North America is not going to be larger in 2001 than it was in 2000.

In the U.S., said Wolfe, producers are slaughtering at least as many heifers this year as last, and so are producers here.

Another big factor in cattle prices remaining high is the value of the Canadian dollar, considering the amount of beef Canada exports to the U.S. The Canadian dollar is at its lowest value in years, "and right now I don't think it's going up," Wolfe said. This spells good news for cattle producers, whose prices remain high as long as the dollar is low.

"But a one per cent increase in the Canadian dollar will take a cent off your calf," Wolfe added.

The agrologist told producers that the fat cattle market has the potential to provide increased returns as well, shifting from 72.5 cents per pound in mid-September of this year, with a potential increase to 80 cents per pound in the new year.

"In the U.S., we've never seen feeder calf prices where they are now; this is like being a canola grower and seeing it at $8 per bushel," Wolfe continued. "Keep a watch on the feeder cattle market and when it gets over 90 cents you should phone your broker and sell."

Low feed prices have had a hand in the cattle boom as well. Although the Canadian barley market has picked up slightly, the U.S. corn market is at historic lows and is unlikely to increase, as American producers keep flooding the market with the crop in order to collect subsidies.

Other good news for cattle producers - beef consumption is up, says Wolfe, both domestically and abroad. "Increased export into Asia will keep us going," he predicted.