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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.

Fed price slips

Alberta direct cattle sales saw limited cash trade last week, and weighted average prices generally slipped $6.25 per hundredweight and $3.50 per cwt. lower than the previous week for steers and heifers, respectively. Fed steers averaged $152.54 and fed heifers averaged 152.70 per cwt.

A few steers traded live last week at $152.25 per cwt., down $5.50 per cwt. from the previous week. Dressed sales were reported $6.50 per cwt. lower than the previous week at $258-$260 per cwt. delivered. Cattle marketed last week were being scheduled for second half of February and first week of March delivery.

Last week’s cash to futures basis weakened to -$7.99 per cwt. but remained at a premium to Ontario. Fed prices in Ontario were fully steady with the previous week with most sales from $254-$255 per cwt. delivered.

Western Canadian steer carcass weights for the week ending Feb. 1 were one pound larger than the previous week but were significantly 36 lb. lighter than the same week last year.

Western Canadian fed slaughter for the week ending Feb. 1 was three percent larger than the previous week at 36,052 head and year to date was eight percent larger at 172,635. Canadian fed cattle/slaughter cow exports to the United States for the week ending Jan. 25 were three percent larger than the previous week at 10,251 head and sharply 28 percent larger than the same week last year.

When looking at the five-year average, fed exports to the U.S. historically trend larger through the first quarter, while slaughter cow exports ease lower as supplies tighten and Canadian domestic demand increases.

Since the start of 2020, weekly Alberta fed prices have tracked closely with a year ago. During the first three weeks of February 2019, fed prices slipped two percent lower to a first quarter low. If this February is the same, a two percent decline would pressure fed prices down to an estimated first quarter low of $149.50 per cwt. Alberta fed steer prices have rebounded higher in 15 of the past 20 years during the last week of February.

In the U.S., active trade late on Feb. 7 saw live sales from US$121-$122 per cwt. in most trading areas, which was steady to $1 per cwt. lower than the previous week. Light dressed trade in the north was $2-$3 lower at $192-$193 per cwt. delivered. U.S. steer carcass weights for the week ending Jan. 25 were six lb. lower than the previous week, averaging 901 lb. The U.S. indicated fed slaughter for the week ending Jan. 25 totalled 501,000 head, the largest for the week since 2011.

Cow volume peaks

In the non-fed picture, D2 cows averaged $86.13 and D3s averaged $76.50 per cwt. Slaughter bulls averaged $101.79 per cwt. Western Canadian cow slaughter totalled over 9,300 head last week, the largest weekly slaughter this year. Cow slaughter volumes have likely peaked for the first half of the year and should decline into spring. Butcher cow prices traded 50 cents to $1 per cwt. lower through commercial auction facilities while rail bids were steady to $1 per cwt. higher.

The price spread between Alberta and U.S. utility cows has narrowed since the beginning of the year, going from +$14 to +$6.50 per cwt. last week. From their low in November, Alberta D2 cow prices have rallied 11 percent.

Auction volume rebounds

More than 63,000 head have traded through Alberta commercial auction facilities and electronic sales in the past two weeks. After a slow start for the first half of January, total Alberta auction mart volumes have caught up and are now equal to last year.

Western Canadian fed prices have dropped $11 per cwt. over the past two weeks, moving feedlot margins back into the red. Live cattle futures have also struggled, dropping $6-$8 per cwt. over the past few weeks.

Trading $1-$5 per cwt. lower, feeders weighing over 800 lb. are now at the lowest point since July 2019. Even though prices are trading $5 per cwt. off their highs, the bright spot continues to be the calf market. Calf prices are $8-$9 per cwt. higher than last year while feeders are trading $1-$4 lower. Alberta calf and feeder prices remain at a premium to the U.S. market.

For the first four weeks of January, Canadian feeder exports totalled 3,438 head, 60 percent lower than last year. Year to date this is the lowest export volume in 14 years. Over the past few weeks some 1,000 lb. heifers have been offered for late summer/early fall delivery and prices have been reported in the low to mid-$170s per cwt. Forward contract prices for yearling heifers off grass are comparable with last year’s cash market.

The Alberta 850 lb. feeder steer cash to futures basis strengthened, going from -$5.11 per cwt. to -$2.34 per cwt. last week. The 550-850 lb. steer price spread was $48 per cwt.

U.S. cutouts lower

In the U.S. meat trade, soft seasonal demand pressured cutouts lower last week with Choice easing US$2.42 lower, averaging $210.93, and Select lower by $5.52 per cwt. to average $205.96. Light to moderate demand was reported on a generally moderate to heavy offering.

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