Soaring loonie
The Canadian dollar has been moving higher since late last year, and last week reached its highest point since the spring of 2000, closing at more than 68 US cents.
Canfax said that is a five cent increase since March 2002, which has a big impact on cattle prices.
Assuming a $77 US per hundredweight market, the equivalent Canadian price before basis adjustment is $113.25 at a 68 cent dollar. That same steer using a 63 cent dollar sells for $122.25 per cwt.
That is a $9 per cwt. difference, or $121.50 on a 1,350 pound animal.
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Assuming a price of $76 US per cwt., an 850 lb. feeder steer equates in Canada to $112 before basis at a 68 cent dollar. A 63 cent dollar would produce a Canadian price of $120.
As a result, Canfax said, currency changes alone have reduced feeder cattle by $68 per head in 2003.
Fed market drops
Canfax said fed cattle prices dropped as the lower American market and higher Canadian dollar took their toll.
Steer prices fell $3.25 per cwt. while heifer prices fell $3.
Canfax said sellers were willing to move cattle because many agree that the highs are in for the spring market.
Volumes were fairly large at 18,500 head, down four percent from the week before.
The narrow-to-near-par basis level prevented American packers from buying Canadian cattle.
Alberta prices March 6 were steers $184.35-$186.75 per cwt. flat rail, with heifers at $108.75-$111, flat rail $184-$186.
Canfax expected a steady market this week, so long as there wasn’t a big swing in the Canadian dollar.
Sellers are still current and average carcass weights are falling as more calves move into the kill mix.
In Montreal, the steer wholesale price is steady this week at $189-$190 per cwt. while the Calgary market is slightly lower at $181-$184.
Feeder cattle steady
Most feeder classes were steady to $1.50 per cwt. lower.
The most pressure was seen on heavier cattle. Heifers and steers over 700 lb. were down $1-$1.50.
Regionally, some sales reported steady prices while other markets were under pressure, Canfax said.
Volume was just over 39,000 head, up 13 percent over the previous week and 36 percent larger than last year.
Most demand came from local buyers.
Slaughter cow average prices edged up by 25 cents to $58.82 per cwt.
Cattle exports slashed
To date, Canada has exported 45,500 head, 54 percent fewer than last year at this time due to the strong dollar.
Local buyers are also considering the higher dollar when estimating their fed cattle sales this summer. This may pressure feeder cattle prices, but tightening supplies and good grass cattle demand should keep prices fairly steady over the next few weeks.
Cow-calf pairs sold at $900-$1,675, with most at $950-$1,400.
Bred cows were fairly steady at $700-$1,450, with most at $900-$1,300.
Bred heifers were $700-$1,450, with most selling at $950-$1,350
Hog prices remain same
Slight decreases in U.S. wholesale prices for all pork cuts, except bellies, led to a decline in the pork cutout value over the week.
Packers are still slaughtering hogs at well above year-earlier levels, said Manitoba Agriculture.
Hog prices were fairly steady during the week, but remain about nine percent below a year ago.
The Iowa-Minnesota daily direct hog price (plant mean, 51-52 percent, lean carcass converted to live weight) ranged between $36.45 US and $36.77 per cwt. during the week.
However, the week’s hog price in the United States averaged close to 1.5 percent above the previous week’s price.
