Canfax report

This cattle market information is selected from the weekly report from Canfax, a division of the Canadian Cattlemen’s Association. More market information, analysis and statistics are available by becoming a Canfax subscriber by calling 403-275-5110 or at

Active fed trade

Alberta direct cattle sales saw active trade last week, and the market tone was fully steady to $1 higher than the previous week. Live trade was reported from $165-$167.75 per hundredweight.

Most of the trade this week was dressed from $275-$278 delivered. The Feb. 28 market tone started out strong, but bids deteriorated by late afternoon.

Buyer interest rebounded March 1, and active trade resumed.

U.S. buying interest enhanced local competition last week and a moderate volume of cattle traded south. Next week’s offering will start out current.

Canadian steer carcass weights for the week ending Feb. 24 crept four pounds larger than last week and on par with last year at 911 lb.

Western Canadian fed slaughter for the four-day week ending Feb. 24 was 12 percent smaller than the previous week, totalling 27,996 head. Year-to-date western fed slaughter is eight percent larger, totalling 233,551 head.

Canadian fed cattle exports to the United States for the week ending Feb. 17 totalled 5,563 head and year to date were down eight percent at 32,290 head.

In the outlook, beef demand is expected to continue to strengthen, and next week’s modest cash offering will remain well supported.

The softer Canadian dollar should continue to encourage U.S. buying interest to enhance the local fed market.

Historically, steer carcass weights remain elevated into March and trend lighter through to May. Cold winter temperatures have reduced feeding performance, and the current fed supply should continue to follow this historic seasonal trend.

The U.S. fed market is expected to firm modestly over the next few weeks and should shore up the local cash market.

Moderate U.S. live trade was reported last week in the south from US$125-$126 and generally $2 lower than the previous week. Nebraska live trade was steady to $1 lower than the previous week from $126-$127.

Calf prices traded from $3 lower to $3 higher than the previous week. Feeders trended $1-$3 lower than the previous week.

U.S. cow prices up

In non-fed trade, D1 and D2 cows traded C$80-$95 per cwt. to average $88.05. D3 cows averaged $78.63.

Butcher cow prices traded steady to $1 lower through commercial auction facilities last week.

On a dressed basis, butcher cows are trading $100 back of the fed cattle market, but last year the price difference was around $85-$88.

U.S. utility cow prices are trading at the highest point seen this year, while Alberta prices are $7.50 shy of their January highs.

Given strength in the U.S. cow market, the price spread between Canada and the United States has narrowed. Last week, Alberta D1, D2 cow prices were at an $8 premium to the U.S. utility market. This is one of the smallest premiums to the U.S. in more than a year.

Looking beyond the North American market, drought conditions in parts of Australia will have to be monitored because it has potential to influence the trim market. Drought has already forced some destocking, and if moisture conditions don’t improve and slaughter rates increase further, more lean trim could enter the North American market.

Heavy stockers discounted

Seasonally it is not uncommon to see pressure on heavier feeders and strength on the lightweight stocker market. Trading $1-$2 lower this week, 900 lb. steers and heifers established new annual lows. From their January highs, 900 lb. and heavier steers have dropped seven percent. From 2011-17 (excluding 2014), the average decline from January highs to first half lows stands at 12 percent.

In terms of lows, in two out of the past three years 900 lb. and heavier steers have established lows in February-early March. With feedlot profitability and recent strength in the calf market, these two factors should lend support to the short keep feeder market.

Cash to futures basis levels have weakened on heavier feeders and are now at the weakest levels since July. Based on the five-year average, the weakest basis levels occur within the next three weeks.

Canadian feeder export volumes have picked up, but on the flipside there are still rumblings of U.S. feeders coming into Canada.

With the announcement that the U.S plans to put import duties on steel and aluminum, volatility in the currency markets will continue. Eastern buying interest has been noted on 800 lb. and heavier heifers, while same weight steers look to be staying in Western Canada for finishing.

Beef prices strengthen

U.S. Choice and Select beef cut-out values strengthened over US$3.50 last week with generally moderate demand on the light to moderate offering. The Choice cut-out value was $222.30, up from $218.40 the previous week. Select was $215.60, up from $212.06 the previous week.

Canadian cut-out values for the week ending Feb. 16 saw the AAA cut-out rally $4.50 higher and AA surged $6.25 higher. Canadian boxed beef load counts were 20 percent smaller than the previous week at 161 total loads.


Markets at a glance

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