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.
Fed set new low
Western Canadian fed prices set new lows last week and are now at the lowest point since October 2017. Fed steers averaged $136.41 per hundredweight, down by $3.66, and fed heifers averaged $135.77, down $3.54. From their first half high in late April to their second half low, fed prices have dropped 16 percent, which is in line with the five-year average.
Western Canadian packers appear to be well positioned with formula and contract cattle for this month, which has moderated interest and limited competition on the cash market.
From the cattle feeders’ perspective, it was another week of just marketing cattle that needed to be sold in order to keep weights under control. Feeding margins continue to be in the red.
Based on Canfax Trends data, winter-placed calves and spring-placed feeders targeting the September fed market have break-evens ranging from $156-$158 per cwt. This would suggest losses are closing in on $300 per head.
Last week dressed sales were reported from $226-$230 per cwt. delivered. Premiums were once again noted for cattle that would grade more than 60 percent and 70 percent AAA. Cattle that were bought last week were scheduled for early October delivery.
This is the third consecutive week that Alberta fed prices have been at a premium to the Nebraska market. On a dressed basis, Alberta fed prices are trading at a $6-$8 per cwt. discount against the Ontario market. For the week ending Sept. 7, western Canadian fed slaughter totalled 41,195 head. For early September, this is the largest slaughter since 2005.
The market is working through peak fed cattle supplies. With longer lift dates and producers fighting the market, heavyweight cattle could become more of an issue in October. Canadian beef exports from January to July are up 14.5 percent in volume and 24.2 percent in value.
In the United States, fed trade was scattered last week and stronger toward week’s end. Dressed sales in the north ranged from US$157-$160 per cwt., which was $3-$10 lower than the previous week. Fed cattle prices are now at the lowest point since October 2016.
Cow prices soften
Non-fed cow prices continue to seasonally soften on reduced demand. D2 slaughter cows traded lower for a third straight week, averaging C$86.53 per cwt., the lowest since mid-July. D3 prices slipped $2.58 per cwt. to average $77.44 per cwt. but were $1.34 higher than the same week last year.
Non-fed dressed cow bids were reported from $167-$170 per cwt. and fed cows traded from $172-$173 per cwt. delivered. Butcher bull prices eased $1.74 per cwt. lower than the previous week to average $102.89 per cwt.
Western Canadian non-fed slaughter volumes for the four-day week ending Sept. 7 eased modestly to 6,278 head and year to date were five percent larger totalling 282,055 head. Non-fed volumes at auction are expected to build now as pairs are split and fall culls make their way to market.
Beef trade mixed
In beef trade, U.S. cutouts eased lower last week with Choice down $9.45 per cwt to average US$219.97 and Select down $5.87 per cwt. to average $198.60.
Canadian cut-out values for the week ending Sept. 6 traded mixed with AAA up C$2.63 per cwt. to average $291.90 and AA down $2.30 per cwt. to average $260.53. The AAA/AA spread widened to $31 per cwt. This is the widest spread since early July 2017 and is nearly two times wider than last year and three times wider than the three-year average.
Light calves get interest
A few special sales flushed seasonal volume of stockers and feeders to market last week and prices generally trended lower. Light 400-500 pound calves were the exception, attracting eastern buyer interest, and prices firmed $2.50-$3 per cwt. higher.
Calves from 500-600 lb. saw prices slip significantly lower last week with steers sharply $9 per cwt. lower and heifers down $3.25 per cwt. Feeding costs have aligned lower and by the end of the week calculated break-evens for 550 lb. steers and heifers fed to finish were trending marginally profitable.
Feeder steers over 700 lb. were $5-$6.50 per cwt. lower than the previous week while similar weight heifers slid moderately $1.50-$3.50 per cwt. lower. Not accounting for risk management, feeding margins for 850 lb. feeders fed to slaughter continue to work back deeply in the red.
Auction volumes are now expected to build, and adequate seasonal demand should continue.