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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.

The average price for both fed steers and heifers rose last week while feedlots continue in the red.

Steers at western Canadian feedlots rose $3.52 per hundredweight, on average, to $128.68, while heifers saw similar gains at $3.53 per cwt. for a price of $126.82.

Feedlots have seen only a couple of profitable months in more than two years, and margins are at their worst level in years. Losses in May and June have been more than $600 per head.

Fewer cattle appear covered by price insurance heading into the summer, which could leave feedlots seeing large equity losses. Breakevens for some fed cattle that were sold last week were around $160 per cwt. for losses of about $450 per head.

Active Alberta trade developed ahead of the mid-week July 1 holiday last week. Dressed sales started fully steady to $10 per cwt. higher than the previous week and another $8 by week’s end.

Weekly dressed prices were $5.50 and $6 per cwt. higher than the previous week’s rail average for heifers and steers, respectively. The weighted average live price was $3.50 per cwt. higher.

The week’s offering was scheduled for one- to three-week delivery.

Western Canadian slaughter climbed for the third straight week to a new annual high of 49,530 head, the largest since September 2019. However, year to date slaughter is down seven percent.

Average steer carcass weights were seven pounds heavier than the previous week at 865 lbs.

Canadian fed exports to the United States were 17 percent larger than the previous week at 9,674 head and on par with last year. Export volume year-to-date is up seven percent.

Canfax anticipates the second phase of the set-aside program should moderate selling pressure in the fed market, saying market-ready feedlot supplies are trending surprisingly current.

In the U.S., northern dressed sales were steady to $2.50 per cwt. lower, from $152-$155 per cwt. delivered. Live trade was steady at $95-$96 per cwt. while in the south live trade was slightly lower at $92-$95 per cwt.

U.S. cow slaughter is rising as that country sees some of its biggest volumes of the year, while in Western Canada cow slaughter remains light, below last year and the five-year average.

Alberta D2 cow prices remain sideways, as they have for the past five weeks, averaging $85.40 cwt. and at a $5 discount to U.S. cows. Meanwhile, Ontario D2 cows set a new annual high at an average $91.50 per cwt. They last averaged over $91 in August 2017.

Good grazing conditions and a $1,200 per head salvage price for better cows won’t encourage cow/calf producers to wean calves or market cows early. Non-fed supply should remain manageable, and higher prices are expected in late July and August.

Alberta D3 cows averaged $75.38, while Ontario D3 cows brought $76.73 per cwt.

Rail grade slaughter cows remained at $160-$165 per cwt. delivered.

For the week ending July 3, calf and feeder prices were mixed on seasonally light numbers. Most orders have been filled but there is some demand on 700-850 lb. feeders. Alberta 750 pound feeder steers were up $8.37 per cwt. on average last week, while 850 lb. steers dropped $6.42.

Ontario interest in the western feeder market has been spotty but there is some demand for heavier weight feeders out of backgrounding yards. Ontario calves and feeders were trading at a premium to Alberta for June but have moved to a discount as 550 lb. calves dropped from $243 per cwt. to $219.

Using historical data, prices for Alberta 900 lb. steers are on track to average in the mid $180s per cwt. for September. That would be higher than last year and seems unlikely, according to Canfax. Feeder prices should be higher in the fall but will be limited by prolonged feedlot losses.

Canada should export just more than 70,000 feeders to the U.S. in the first half of the year, the lowest volume since 2011.

In the U.S. beef trade, choice cut-out value was down $2.82 to $205.44 per cwt., while Select cutout dropped $1.17 to $198.76. Large volumes of heavy cattle have increased Choice supplies, and the Choice-Select spread continues to tighten, sitting at $6.68.

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