It was a horrible week for Chicago live cattle futures with the nearby contract falling US10.625 cents per pound or almost eight percent.
The Canfax Canadian cash steer weighted average fell almost C$9 to $160.73 per hundredweight from last week.
Alberta fed cattle prices are now below year ago levels for the first time since the spring of 2013.
As the fed price falls, feedlots can’t afford the high prices for calves and yearling so those prices too are dropping.
The Canfax feeder steer average fell $12.59 per cwt. this week and the heifer average fell $12.33.
Since the start of September the October lean cattle contract has fallen almost 13 percent.
The weak loonie is helping to provide a partial cushion to Canadian producers. Fed prices in Canada are down about 10 percent in the past month while U.S. prices are down 15 percent.
The price fall of recent weeks is greater than what many expected but a decline is not unusual in early autumn as market-ready cattle numbers rise and beef demand drops off from the summer.
Traditionally, the fourth quarter sees a rally as market-ready numbers tighten and beef demand picks up for the holiday season.
Also, the Chicago market is strongly technically oversold so there is hope for some recovery there.
Canfax believes a rally going into November in Canada is possible but it will likely be modest and much will depend on the strength of the loonie
The sharp fall in this week’s Chicago live futures market was tied to dropping beef prices and cash cattle prices.
One reason beef is off is that carcass weights are much heavier than this time last year.
Ron Plain of the University of Missouri notes the average U.S. steer dressed weight for the week ending on Sept. 19 was 923 pounds, a record high that was up four lb. from the previous week and up 36 pounds from the same week last year.
The U.S. Choice cutout to Oct. 1 fell to US$207.55, down $7.30 from the previous week and down $31 from last year at this time
The steer carcass weight in Canada is 921 pounds, up 44 lb. from the same time last year.
But in Canada, partly due to the weaker loonie, the beef price has not fallen as it has in the U.S.
Canfax said Canadian cutout values are still C$21-$23 per cwt. higher than year-ago level.
The Daily Livestock Report from the CME Group notes that U.S. beef exports in the last four weeks have averaged about 10,297 tonnes, slightly higher than the average the previous four weeks but 23 percent lower than the same period last year.