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 prices trend higher

Fed cattle prices have generally been in a slight uptrend for the past two months. Higher prices during the summer are not that common, but the market is moving higher from depressed levels.

Western Canadian fed prices are at the highest point since early June. That said, fed prices are still below last year and are trading closer to the 10-year weekly average of $133.08 per hundredweight versus the five-year average of $148.56 per cwt.

Last week dressed sales ranged from $230-$235 per cwt. delivered. Cattle that were bought last week would be picked up within the next one to four weeks.

Over the past two months, the procurement strategy from both major packers has not changed. One packer continues to buy hand to mouth, trying to keep lift times less than two weeks. The other packer continues to have a solid cushion of front-end cattle, buying one month and in some cases longer before delivery.

Western Canadian fed slaughter for the week ending Aug. 15 totalled 49,256 head. This stands as the third largest weekly slaughter since 2004. Western Canadian fed slaughter volumes have been higher than last year in 10 of the past 12 weeks. Since the end of May, 32,500 more fed cattle have been slaughtered than last year.

In Ontario most of the dressed sales were reported in the mid-$240s per cwt., fully steady with the previous week. Eastern Canadian steer carcass weights averaged 908 pounds, 13 lb. smaller than last year.

Over the past few weeks a few more fed cattle have been accepted on the set-aside program. These volumes are small and should not have an impact on the market when the cattle are delivered. September is traditionally a slow demand period for beef as summer holiday bills and back to school expenses come due.

With many people staycationing this year and back to school expenses expected to be lower than other years due to the pandemic, this may help mitigate some of the typical lull in beef demand for September.

In the United States, most dressed sales in the north reported from US$168-$170 per cwt., which is $1-$3 per cwt. higher than the previous week. Live sales in the south ranged from $106-$107 per cwt., $2-$3 higher than previous.

For the week ending Aug. 8, U.S. beef cow slaughter totalled 57,813 head, two percent larger than last year. Beef cow slaughter has been higher than last year in 11 out of the past 12 weeks.

Cow, bull prices lower

Non-fed prices realigned lower last week as lucrative margins shifted packers’ focus toward fed cattle and Labour Day buying was turned toward middle meats. Slaughter cow prices eased C$1.75 per cwt. lower for D2s, to average $87.75, and $2.75 per cwt. lower for D3s, which averaged $76.57 per cwt. Butcher bull prices slipped more than $3 per cwt. lower than the previous week to average $116.95 per cwt. Dressed cow bids also dropped to $170-$175 per cwt. delivered last week.

Western Canadian non-fed slaughter for the week ending Aug. 15 was up eight percent from the previous week totalling 4,815 head and year-to-date was down 24 percent at 198,726 head.

Non-fed offerings for this week are expected to be manageable, but demand seasonally could begin to soften.

Feeders gain momentum

Alberta feeder prices seasonally gained momentum last week with good demand observed for all types of stockers and feeders. Pasture conditions are generally in much better shape than last year, and delayed marketings have contributed to below year-ago year-to-date auction volumes.

Good quality 500-600 lb. steer calves saw prices surge $9.25 per cwt. higher than the previous week, and similar weight heifers rallied almost $5 per cwt. higher. Compared with the same week last year, 500-600 lb. calves traded significantly $10-$12 per cwt. higher.

Feeders from 600-800 lb. traded unevenly stronger last week with steer prices fully steady to $4 per cwt. higher. Same weight heifers realigned $7-$8 per cwt. higher and may have gained price support from cheaper new crop feedgrain and improved feeding margins.

Saskatchewan 700 lb. feeders for late September-October delivery traded at a significant premium to the spot market with sales reported from $209-$216 per cwt. Large feeders heavier than 900 lb. saw prices firm $5-$7 per cwt. higher last week and with a $2 and $4 per cwt. premium to spot for September and October delivery, respectively.

Weekly auction volumes were 27 percent lower than the previous week at 20,863 head but 19 percent larger than the same week last year. A significant volume of current sales continue to be through internet and electronic sales. Year-to-date auction volumes were 12 percent below year ago at 603,373 head.

The U.S. Department of Agriculture reports that Canadian feeder exports for the week ending Aug. 8 were 40 percent lower than the previous week at 1,101 head. Total year-to-date feeder exports were 50 percent lower than year ago at a modest 77,911 head.

Auction volumes are anticipated seasonally larger this week with good demand anticipated for all types of feeders. Stockers and feeders should continue to gain price momentum right through to the end of September. Broad based buying interest is anticipated this fall with ample forage stocks encouraging backgrounding outside of feedlots.

U.S. cutout surges

In U.S. beef trade, active Labour Day buying continued last week, and the U.S. cut-out values rallied sharply higher. Choice surged almost US$14.50 per cwt. higher, to average $225.38, and Select rose almost $9 per cwt. higher to average $206.31 per cwt.

U.S. slaughter for the week was estimated modestly larger than the previous week at 652,000 head.

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