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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 doldrums continue

This is the first time since October 2012 that fed prices have averaged below $110 per hundredweight. Fed cattle prices are $49 per cwt. lower than last year and $64 per cwt. lower than the five-year average.

Given depressed prices and uncertainty when unpriced cattle will be slaughtered, some producers have started to scale back feed rations, going from 75 percent barley to less than 50 percent barley.

This week both major packers were again not active on the cash market, and buying interest was noted from two smaller Alberta packers. Sale volumes were rather large and dressed sales were reported at exclusively $180 per cwt. delivered. Lift dates varied because some cattle would be picked up in one to two weeks while others would not be picked up until mid to late June.

Early May is traditionally when we see the strongest cash to futures basis levels of the entire year, but this is not the case this year. Last week’s cash to futures basis was reported at -17.71. For the beginning of May, this was the weakest basis since 2005.

Last week Ontario dressed sales were reported at $238 per cwt. delivered, fully steady with the previous week. If this premium in Eastern Canada remains, there is a possibility some cattle from Alberta and Saskatchewan could be shipped to Eastern Canada for slaughter.

Major packers are expected to make a return to the cash market this week but could be limiting the amount of cash cattle and grid cattle they buy from producers to help manage cattle weights. Alberta fed prices are trading at more than a $40 per cwt. discount against the U.S. market, and a price bounce this week was possible. Details of a set-aside program for fed cattle will be available soon.

In the U.S., mid-week live sales last week were reported from US$95-$110 per cwt. and on May 8 were reported at $115 per cwt. Top end sales at $115 per cwt. are $15-$20 per cwt. higher than the previous week. Total U.S. beef exports for the month of March were 7.8 percent higher than last year. Japan was the top importer.

U.S. exports for March were 40.1 percent higher than last year.

Low trade in cows

Non-fed volumes have tightened at auction, and prices firmed higher last week. Fed slaughter continued to be the priority, and no significant direct dressed trade has been reported.

D2 cows in the West averaged $71.67 per cwt. and in the East averaged $74.67. D3 cows in the West averaged $60.70 and in the East $63.60. Slaughter bull prices saw an uptick, averaging $104.70 per cwt.

Western Canadian non-fed slaughter for the week ending May 2 was down 22 percent from the previous week at 1,448 head and year to date were 18 percent lower at 135,915 head. A light volume of non-fed cows was exported to the U.S. for slaughter, where prices were reported around C$120-$125 per cwt. dressed in the yard.

Strong trim and grind demand should strengthen non-fed prices this week.

Feeder price strengthens

Alberta stocker and feeder prices strengthened last week with good overall demand across the board. Calves from 500-700 pounds saw prices firm $2-$4 per cwt. because bunk replacements and interest for grass cattle remains strong. Larger feeders from 800-900 lb. saw good buyer interest locally and from the East to place against the fourth quarter of 2020.

Both 900 lb. steers and heifers saw prices rally over $4 per cwt. higher than the previous week. Total weekly sale volumes were down 13 percent from the previous week and were nine percent lower than the same week last year.

Year to date auction volumes are 20 percent lower than year ago at 386,513 head.

The U.S. Department of Agriculture reports that Canadian feeder exports for the week ending April 25 were 12 percent larger than the previous week at 5,131 head. Year to date feeder exports remain below year ago, totalling 54,401 head.

Pasture conditions are off to a great start across most of Canada and strong demand should continue for feeders up to 800 lb. Trade last week saw 900-1,000 lb. heifers for late summer delivery prices from $164-$170 per cwt. f.o.b. the ranch.

August price projections for 850 lb. steers with the five-year historical basis of -1.37 per cwt. are estimated at $191.90 per cwt. Increased fed slaughter should begin to free up pen space for bunk replacements.

Record cut-out price

In U.S. beef trade, cut-out values surged more than US $90 per cwt. higher than the previous week to new historic highs of $458.54 for Choice and $448.57 for Select. Fresh 90 percent trim value was reported almost $18 per cwt. higher than the previous week.

National U.S. slaughter increased modestly last week to 452,000 head but was still 215,000 head below a year ago. Larger slaughter next week is expected to result in overhead price resistance for cutouts.

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