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.
Dismal fed picture
Fed steers averaged $148.67 per hundredweight last week, down $2.66, and fed heifer prices dropped by $2.29 to average $148.53.
Fed prices have declined 7.5 percent since the beginning of 2019. From January to February this has been the largest decline over the past 20 years. The only year that experienced a comparable decline was 2016, when prices dropped 6.5 percent.
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Trading $11 per hundredweight lower over the past four weeks, fed prices closed below $150 per cwt. last week. The last time prices traded below that level in February was in 2014.
Buying interest between the three western Canadian packers was light with one packer buying most of the cattle. Lack of competition on the cash market could be related to one packer having more formula cattle around it. On the cash market there were reports of up to a $6 per cwt. difference on live bids between the two major packers. Most of the cattle bought will not be lifted until mid March.
U.S. packers indicated they had enough Canadian fed cattle contracted for this month, and despite Alberta fed prices being at an estimated $16 per cwt. discount against the U.S. market, U.S. buying interest was light to nonexistent and all reported cash sales traded locally last week.
Basis levels remained disappointing. Last year at this time the Alberta fed market had the strongest prices in North America, whereas last week prices were at a discount against the U.S. and Ontario market on a dressed basis.
As for the outlook, with larger carcass weights and bigger slaughter volumes, year to date 2019 Canadian fed production was up 13 percent compared to last year. Larger beef production could be part of the reason why the fed market has struggled. From a basis perspective, the market is signalling to keep cattle on feed. That said, big weight issues and lack of competition does not bode well.
In the U.S., light trade was reported in Iowa with dressed sales ranging from US$198-$200 per cwt., which was steady to $1 lower than the previous week. Live sales in Iowa ranged from $124-$127, which was steady to $2 per cwt. higher than the previous week.
Non-fed prices steady to higher
D2 cows ranged from $75-$90 per cwt. last week to average $82.17, and D3s traded $65-$80 to average $74 per cwt. Average slaughter bull prices rose by $5.12 to average $96.55.
Non-fed cattle saw good demand last week and prices trended steady to higher. D2 slaughter prices were steady, and D3 prices firmed $1.17 per cwt. higher. Dressed prices were unchanged at $162-$167 per cwt. delivered, and butcher bull prices rallied as noted above.
Western Canadian non-fed slaughter has ramped higher every week so far this year and for the week ending Feb. 9 was 16 percent larger at 12,472 head. Year to date western non-fed slaughter was 13 percent larger at 60,895 head. Non-fed packer inventories are ample.
Feeder picture mixed
Alberta calf and feeder prices were mixed last week with average prices trending steady with the previous week. Auction volumes were moderated by cold weather, and some sales were rescheduled.
Calves less than 600 pounds generally traded fully steady with the previous week, but strong interest in grass type 500-600 lb. steers rallied prices $3.42 per cwt. higher. Mid-weight 600-800 lb. feeders trended mostly steady to $2.35 per cwt. higher, while larger feeders over 800 lb. slid over $2 per cwt. lower.
Auction volumes were seasonally light and were a significant 35 percent lower than the same week last year at 15,860 head. Year to date auction volumes total 130,177 head and are four percent larger than year ago.
The USDA reports that Canadian feeder exports to the United States for the week ending Feb. 2 totalled 3,147 head and year to date volume is 25 percent larger than 2018 at 11,644 head.
In the outlook, calf prices are expected to seasonally firm higher. Large feeders to place against the sluggish summer fed market should see prices continue to deteriorate. The Alberta 500-850 lb. steer price spread widened considerable last week as grass cattle interest intensified. Auction volumes should rebound this week as a weather backlog of feeders comes to town.
Beef trade
U.S. cut-out values eased lower last week with moderate demand reported on light to moderate offerings. Choice averaged US$216.07, down slightly from the previous week. Select averaged $210.41, also down slightly.
Canadian cut-out values for the week ending Feb. 8 were not available. Total Canadian slaughter for the week ending Feb. 9 trended six percent larger to 60,381 head, which was 10 percent larger, year to date, at 334,038 head.
