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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 www.canfax.ca.

Active fed trade

Alberta direct cattle sales saw active trade last week, and average prices firmed modestly higher. Fed steers averaged $154.94 per hundredweight and fed heifers averaged $154.08 per cwt. Most dressed sales were reported at $260-$261 per cwt. delivered, steady to $1per cwt. higher than the previous week.

Flat live trade with no weight breaks was reported comparable with dressed sales. U.S. packer bids were steady with the previous week at US$198 per cwt. delivered, and a light volume of local cattle traded south.

Cattle marketed last week are scheduled for end of December delivery. Western Canadian fed slaughter for the week ending Dec. 7 eased eight percent lower than the previous week to 34,117 head. Year to date western slaughter was six percent larger, totalling 1,964,878 head. Canadian steer carcass weights for the same week were four pounds heavier than the previous week at 931 lb. and were three lb. lower than a year ago.

Following the E. coli recall at Ryding-Regency, Ontario fed prices have traded sideways at $236-$240 per cwt. delivered for the past seven weeks. Despite the permanent plant closure, Ontario market-ready supplies have begun to tighten. Local packers continue to add shifts, and a limited number of cash cattle are heading to Alberta each week for slaughter.

U.S. buyer interest has also been reported, and a few Ontario cattle traded south last week. The majority of Ontario trade last week was reported dressed from $240-$245 per cwt. delivered, and weighted average steer prices firmed around $4.50 per cwt. higher than the previous week.

Packers have secured ample start-up inventory for the new year, and lacklustre post-holiday domestic beef demand is anticipated. Export demand is expected to be supportive during the first quarter of 2020, and feedlot supplies should continue to tighten.

In the United States, light live trade was reported in the south last week with prices fully steady with the previous week at US$119 per cwt. Scattered live trade was reported in the north at $119-$120 per cwt., steady to $1 higher than the previous week.

Non-fed market tightens

Non-fed volumes through commercial auction facilities have started to tighten. Market lows are in the rear- view mirror, and seasonally stronger prices are being realized in December. This week butcher cows traded $1.50-$3 per cwt. higher. D2 cows averaged $84.33 and D3s were at $72.13. Slaughter bulls averaged $99.09 per cwt.

Western Canadian cow slaughter for the week ending Dec. 7 totalled 10,156 head. That was the fourth consecutive week that cow slaughter volumes exceeded 10,000 head. The last time there were four consecutive weeks over 10,000 head of cow slaughter in the fall was 2010.

This week is the last full week to buy cows through commercial auction facilities. Packers were expected to be more aggressive on sale barn cows this week and might be willing to bid a premium for producers who are willing to deliver cows over the holidays.

If Australia ever gets out of its drought situation, there are some estimates that Australian beef exports in 2020 could be down as much as 10 percent, further supporting North American trim values.

Manitoba calves strong

One of the biggest surprises last week was the strength of the Manitoba calf market. Steers weighing 550 lb. and 650 lb. traded at a $1-$2 per cwt. premium compared to the Alberta market. Based on sale barn data from North Dakota last week, U.S. steer calves weighing 500-599 lb. averaged $158 per cwt. Using a $0.7586 Canadian dollar to convert U.S. prices to Canadian equivalent, 550 lb. calves in the U.S. are working back to $208 per cwt. Manitoba calf prices remain at a premium to the North Dakota market, and it is safe to assume Manitoba calves are not being exported into the U.S.

Strength on the Manitoba calf market is likely coming from eastern Canadian feedlot demand. The forward delivery feeder market was lightly tested last week, and feeders for January delivery were priced at a premium compared to February delivery prices.

Canadian feeder imports from the U.S. for October totalled more than 46,000 head. It is the largest monthly import volume ever reported. The way things are shaping up, Canada will be a net importer of feeder cattle this year.

Last week, bred cows traded from $1,300-$2,300 per head and averaged $1,655 per head, $270 lower than last year. Older cows and bred cows with later calving dates continue to be a tough sell. Bred heifers traded from $1,500-$2,700 per head and averaged $1,980. Some bred heifers are not bringing much more than feeder value.

Based on average prices, last week it took 1.35 steer calves (550 lb.) to buy a bred cow and 1.62 steers to buy a bred heifer, whereas last year at this same time it was taking more than 1.5 550 lb. steer calves to buy one bred cow and almost 1.75 steers to purchase a bred heifer. Bred cow and heifer prices traditionally weaken into January.

Beef trade

U.S. cutout values were down US$9.95 per cwt. on Choice and $5.56 per cwt on Select last week. Choice averaged $215.65 and Select $202.56 per cwt. A weaker tone developed because most holiday procurements were completed.

Canadian cut-out values for the week ending Dec. 7 traded mixed with AAA down $4 per cwt. to average $295.01 and AA up $1 per cwt. to average $274.94. End meats contributed to most of the decline, while middle meats were steady to two percent higher. The AAA/Choice spread narrowed from -$10 per cwt. to -$5 per cwt. The AA/Select spread narrowed from -$8 per cwt. to -$3 per cwt. Cutouts have likely peaked and tend to move lower toward the year end.

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