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.
Steer averages rise
Weighted average steer prices were more than $151 per hundredweight last week, the highest since March. However, western Canadian fed prices are $12 per cwt. below last year and $13.50 per cwt. lower than the five-year average. Fed prices for January were on track to average around $150 per cwt., the lowest January since 2014.
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Producers selling cash cattle are in a tough spot because basis levels are historically strong yet cattle being sold are still offside. Competition on the cash market was limited with one packer buying most of the cattle. Dressed sales were reported from $253-$255 per cwt. delivered. Most if not all cattle that traded last week were being scheduled for the week of Feb. 8 delivery.
Over the past few weeks there have been reports of packers buying cash cattle with heavy weight carcass discounts, some at $25 per cwt. on carcasses weighing more than 1,000 or 1,050 pounds.
Western Canadian fed slaughter for the week ending Jan. 23 totalled 45,500 head. The last time that level of slaughter occurred in January was in 2005.
Sales in Eastern Canada were reported from $236-$238 per cwt. delivered, steady with the previous week. Cattle were being booked for one to four week delivery. Since the end of November, fed prices have been stuck in a $3 per cwt. trading window with prices ranging from $138-$141 per cwt. If the Alberta-Ontario price spread widens further, more fed cattle from Eastern Canada could start coming west for slaughter.
February can be a tough month for the fed cattle market. Alberta fed basis levels historically weaken from January to February. The February cash-to-futures basis is the weakest of the year. Only once in the past 10 years have fed prices strengthened from January to February and that was in 2011. There have been reports that packers may slow slaughter rates, with a few four-day weeks possible.
In the United States, a stronger price tone was noted toward the end of last week. Dressed sales in the north ranged from US$175-$180 per cwt., which was $6-$7 per cwt. higher than the previous week. Live sales in Texas and Kansas were reported from $111-$113 per cwt., $1-$3 per cwt. stronger.
Based on the U.S. Department of Agriculture’s Jan. 1 cattle inventory report, total U.S. beef cows were reported at 31,157 million head, down 181,700 head, or 0.6 percent, from last year.
Cow, bull prices ease
Non-fed prices were steady to softer last week. Slaughter cow prices eased C$1 per cwt. lower than the previous week, while D3s held fully steady. D2s averaged $74.08 and D3s averaged $63.01 per cwt. Dressed cow bids aligned lower to around $145-$150 per cwt. delivered. Butcher bull prices dipped by $2 per cwt. lower than the previous week to average $97.75 per cwt.
Ontario D2 cows rallied $5.40 per cwt. higher than the previous week but closed at a $10.20 per cwt. discount to Alberta.
Western Canadian non-fed slaughter for the week ending Jan. 23 surged 29 percent larger than the previous week to 9,032 head, and cow slaughter was the largest since mid-March 2020, totalling 8,717 head. Good trim and grind demand was reported last week.
Auction numbers rise
Auction offerings continued larger than a year ago and Alberta feeder prices rebounded higher. Good demand was observed for all types of steers last week, and prices averaged $2.28 per cwt. higher. Heifers traded unevenly with calves less than 700 lb. steady to softer. Larger heifers saw prices rally $1.50-$2.50 per cwt. higher. Interest in replacement-calibre heifers was likely a contributing factor.
December placements and January cattle-on-feed volumes have been reported lower than a year ago, while December fed marketings surged 16 percent larger. Empty pens and somewhat softer grain prices are encouraging feedlots to try and place a few more cattle on feed.
Good eastern buying interest continued last week for large calves to place against the fourth quarter fed market despite Alberta steer calves trading at a more than $6 per cwt. premium to Ontario. Early grass interest was also price supportive last week.
Weekly auction volumes were 28 percent lower than the previous week at 24,047 head and were 27 percent larger than year ago. Canadian feeder exports to the U.S. for the week ending Jan. 16 were modest at 474 head.
Good broad-based demand should continue this week for all types of feeders, and prices are anticipated steady to stronger. Backgrounded feeders carried over into the new year will continue to supplement auction offerings. Ample feeder supplies and poor grazing conditions in the U.S. are expected to limit feeder exports from Canada during the first quarter.
Cutouts rise again
In U.S. beef trade, wholesale buying slowed last week as cut-out values rallied sharply higher. Choice and Select cutouts surged more than US$10.50 per cwt. higher than the previous week to close Jan. 28 at $231.99 and $220.88 per cwt., respectively.
Total U.S. cattle slaughter is estimated two percent larger than a year ago at 653,000 head. Ample market-ready supplies and large harvests are anticipated again this week.
