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 www.canfax.ca.
Bids improved for the week ending July 12 following last week’s standoff between feedlots and packers that resulted in a deflated cash cattle trade.
All three western Canadian packers were actively bidding this week, and most were looking for cattle delivered in the next two to three weeks. Most of this week’s trade occurred on a dressed basis from $242-$244 per hundredweight.
Current live steer prices are about $10 per cwt. below last year. Alberta and Ontario prices are comparable this week.
Feedlots remain generally current due to larger kills, and some operations have opted to carry their stock forward for a week or two because cattle sold on the cash market are showing a loss. The U.S. market is stronger, but caution is advised as the Canadian dollar approaches 77 cents.
The July cattle-on-feed report for Alberta and Saskatchewan found the largest placements since 2001. A large number of lightweight steer dairy calves were placed on feed, and these could take about a year to achieve market weight. Overall, fed marketings are down six percent as the beef herd continues to shrink in size.
Feedgrain prices continue to be expensive. Lethbridge barley ranged from $282-$293 per tonne, while corn was $294. Ontario corn is averaged at $239.74 per tonne.
Alberta feeder market
The feeder basis has been weakening, which is in line with past trends that find July to usually be the weakest time for the second half of the year.
Alberta 850 pound steers traded $5 per cwt. lower. Steers in the 800-900 lb. range averaged $173 per cwt., while Ontario was $3 higher. Trade was negligible in the other provinces.
Alberta calf prices for 550 lb. steers averaged below $210 per cwt. this week. From the highs of late April, Alberta prices have dropped 12 percent. However, Alberta is posting better prices than Ontario, where their calves have averaged less than $200 per cwt. for the last three weeks.
Cow slaughter up
For the week ending July 6, Western Canada experienced its largest cow slaughter since 2009. Western D2 cows averaged $84.88 per cwt., while Ontario was $2 lower. Butcher bull prices strengthened $3 per cwt., and top end sales were reported in the low $130s per cwt., the second highest bull price reported this year.
So far this year 415,550 head of live cattle have been exported to the United States, a considerable improvement over last year. The majority of live exports were for slaughter cattle, but feeder shipments are starting to pick up.
International Canadian beef sales continued to soar. In the first five months of 2019, beef exports reached 27,872 tonnes, or 19 percent more in volume, and posted a 31 percent improvement in value over the same period last year. Domestic beef production is up nine percent for the same period, and that extra meat was absorbed by exports. The U.S. takes around 70 percent while the rest ends up mostly in Asian markets.
Until June 25, the Chinese market was strengthening, but recent bans on Canadian red meat because of alleged fraudulent export certificates on pork has stopped trade. The impact won’t show up until the July export report, and its magnitude will depend on how long the suspension lasts. It might also have an impact on nearby markets such as Japan, Hong Kong and Vietnam because some products could be redirected to these markets.
Canadian cut-out values for the week ending July 5 saw AAA and AA rebound about $3 per cwt. with strong rib prices. The AAA cut-out value averaged $278.45, while AA averaged $260.46 per cwt. The AAA/U.S. Choice spread strengthened from -$12.36 per cwt. to -$7.89 per cwt. Prices for 85 percent trim were around $2.73 per pound.