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.

Alberta fed steer and heifer prices moved to a premium against Nebraska on a cash-to-cash basis last week, the first time since late January.

Average prices rose again, with steers at $133.85 per hundredweight, up $5.17, and heifers up $5.94 to average $132.76.

This fits the July pattern of the last two years, with upticks followed by lower August prices.

One packer is still not taking grid cattle, resulting in a few more trading on the cash market.

All three western Canadian packers bought last week during moderate to active trade.

Dressed sales ranged from $223 to $225 per cwt. delivered.

Lift dates are tightening and there are also reports that packers are pulling July contracts ahead of schedule.

A few Saskatchewan cattle went west for slaughter as the industry continues to catch up to pre-COVID-19 backlogs and slowdowns.

In the past 30 years, only six times have first-half highs occurred in January—1995, 1996, 2006, 2016, 2018 and 2020. Second-half lows then occurred four times in August and once in early September.

Based on the market disruption this spring, analysts say they can’t put a lot of weight on similar price years moving forward into August.

Western Canadian slaughter totalled 50,348 as of July 4; eastern slaughter was 11,037.

Average steer carcass weights for the same time period were 871 pounds, while heifers averaged 802 lb.

In Eastern Canada, packers have continued to run at full capacity although there were some disruptions on the cull cow market and some fats destined to the northeastern U.S. plants.

The Ontario fed market tends to peak in late May or June. Prices rallied in those months on strong demand and tighter supplies but dropped dramatically by late June. Dressed trade declined from $280 per cwt. to less than $230 per cwt.

Ontario generally sees an average decline of 14.1 percent in the fed market from its first-half high to second-half low. This would put the low at $241 per cwt., but it has already dropped more than that, which Canfax suggests means there is more downside risk later in the summer or early fall.

In the U.S., northern dressed sales were up $5 to $7 per cwt. from the previous week, while southern live trade was steady to $1 lower.

U.S. year-to-date imports from Mexico are up five percent over 2019.

U.S. packers have been quick to get back to near pre-COVID levels. The largest weekly kill this year was slightly less than 685,000 head, which is the largest since 2011. Five weeks after that, slaughter dropped by nearly 234,000 head and then climbed by 200,000 before dropping before the July 4 holiday.

Fed slaughter in the second quarter was expected to be slightly higher than last year but was 17 percent lower due to production issues. About 1.16 million fewer fed cattle went to slaughter in the U.S. in the second quarter, leaving feedlots with large backlogs to now work through.

U.S. cow slaughter didn’t decrease as much and has rebounded quicker to remain well above levels of a year ago.

Year-to-date fed slaughter is six percent below 2019, while cow slaughter is up three percent.

Western Canadian cow slaughter is still light with 5,119 head moving in the short holiday week and 170,255 year-to-date, down 25 percent.

Alberta D2 cows rallied to average $89.55, or $4.50 per cwt. higher, while D3 cows were up $2.71 to $78.08 per cwt.

Ontario D2 cows averaged down at $85.38.

Dressed cow bids were scarce but steady to stronger at $165 per cwt. delivered.

Demand for non-fed slaughter is expect to remain good as supplies tighten through the summer.

For the week ending July 10, calf and feeder prices were mixed as steer prices firmed modestly higher and heifer prices were steady to modestly lower. This is typically one of the smallest auction volume weeks of the year. Volumes were 21 percent lower than last week, 22 percent lower than the same week last year and down 13 percent year-to-date.

Alberta 550-lb. calves are averaging $3 per cwt. higher than last year. Feeders heavier than 700 lb. were up between $1.25 and $4.25 per cwt.

Ontario interest in larger feeders was supportive as 850 lb. steers trade stronger.

Total year-to-date feeder exports are down 50 percent at 71,363 head.

In the U.S. beef trade, choice cut-out value was down $2 to $203.59 per cwt., while Select cutout dropped $4 to $194.83.

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