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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 backs off

After averaging in the mid $140s per hundredweight for the previous three weeks, fed prices took a step backward last week with weighted average heifer and steer prices dropping $4.50-$8 per cwt. Fed steers averaged $138.42 and fed heifers averaged $137.04 per cwt.

Active trade was noted last week with dressed sales ranging from $230-$235 per cwt. delivered. Most of the cattle that traded were fed calves, but there were still a few yearlings on offer. Competition on the cash market was limited with one packer buying most of the cattle. One packer was buying for one to two week delivery while the other was buying for mid to late July delivery.

A few cattle from Alberta, Saskatchewan and Manitoba were purchased to go to Ontario for slaughter. There was no price premium over the western Canadian market to go east, but cattle would be slaughtered immediately.

Last week was the second consecutive week that western Canadian fed slaughter volumes exceeded 42,000 head. Packers seem to be running at or above 90 percent capacity. With western Canadian steer and heifer carcass weights above last year, it is not surprising there is a higher percentage of yield grade 4 and 5 cattle coming to market compared to last year. With carcass weights expected to stay above year ago levels, this will limit any price advancements for the 50 percent trim market.

In Ontario no bids were reported and packers indicated they have their needs covered for June. With strong prices in Eastern Canada over the past few weeks, fed supplies are being sold ahead of schedule.

In Western Canada, some fed cattle that were sold in April for May delivery still have not been picked up and are at least one month behind schedule from their original slaughter date. There have been reports that packers are either waiving or increasing weight breaks to 1,100 pounds on some of the cash and contract cattle that are behind schedule.

In the United States, cattle trade was scattered last week. Dressed sales in the north ranged from US$165-$172 per cwt., which was $13-$15 per cwt. lower than the previous week. Live sales were reported from $103-$108 per cwt., which was $2-$10 per cwt. lower.

Wholesale prices set new highs in May and so did retail prices. The U.S. Department of Agriculture’s all-fresh retail beef price for May was reported at $7.04 per lb. Retail beef prices are 19 percent higher than last year while pork retail prices are four percent higher than last year.

Cow price dips

A moderate volume of non-fed cattle was reported at auction last week and prices were mixed. Slaughter cow prices eased by more than $2 per cwt. compared to the previous week. D2s averaged $84.64, and D3s averaged $74.83 per cwt. Butcher bulls saw prices firm $2 per cwt. higher to average $117.68.

Western Canadian non-fed slaughter for the week ending June 6 was down four percent from the previous week to 3,590 head and year to date was 24 percent lower at 151,340 head. Trim and grind prices have trended sharply lower over the past few weeks and have pressured slaughter cow prices lower.

Pasture and forage conditions are off to a great start, and a few quality dry cows could be saved from the kill floor and be exposed to a bull. Slaughter cow supplies are expected to tighten, and steady to slightly stronger prices are anticipated.

Feeder heifers top steers

Alberta feeder prices traded unevenly last week with steer prices softening modestly and heifer prices trending steady to slightly higher. Calves traded mixed with steers from 400-600 lb. easing modestly lower while heifers aligned modestly higher.

Eastern buying interest continued in the Alberta calf market again last week as 500 lb. steer calves traded at a $15.26 per cwt. discount to Ontario. Last week’s average 550 lb. Ontario steer price was the highest since November 2017 and for a second week in a row was stronger than the five-year average.

Feeder heifers heavier than 600 lb. saw prices firm around $3 per cwt. higher last week while similar weight steers saw prices soften. Last week’s narrowing of the steer/heifer price spread may be the result of good forage and pasture conditions and interest in exposing grass heifers.

Weekly auction volumes were two percent lower than the previous week and 24 percent larger than the same week last year. Year to date auction volumes are 14 percent below year ago at 481,914 head.

The USDA reports that Canadian feeder exports for the week ending May 30 were down 13 percent from the previous week at 2,047 head, and year-to-date volume was down 45 percent to 68,460 head.

Demand for grass cattle is expected to soften, and calf prices should seasonally ease lower. The steer/heifer calf price spread is expected to narrow modestly as more fed cattle are marketed and demand improves for bunk replacements. Feeders heavier than 700 lb. to place against the fourth quarter fed market could see prices continue generally steady. The trade range will continue to widen based on quality and supplies through the rest of June.

US cut-out value drops

In U.S. beef trade, cut-out values eased sharply lower again last week as beef production rebounded. The Choice cut-out values dropped $36.70 per cwt. lower than the previous week to average $235.56, and Select saw a sharp $40.53per cwt. price decline to average $219.88.

Since the record high value of $475.30 per cwt. set May 12, the Choice cutout steadily declined for 22 straight days to close almost 50 percent lower on June 11. The Select cutout has surrendered 49 percent of its value from a May 11 peak.

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