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.

Record carcass weights

Thin Alberta and Saskatchewan dressed sales were reported at $225 per hundredweight delivered, $2 per cwt. higher than the previous week. However, sale volumes were too light to establish a weighted average steer and heifer price last week.

Cattle that traded in Saskatchewan are coming west into Alberta for slaughter. Cattle sold last week were being scheduled for early to mid-December delivery. Based on light trade, Alberta fed prices are trading at an estimated $11 per cwt. discount to the Nebraska market. U.S. buying interest was noted on the western Canadian cash market, but no sales were confirmed. Depending on freight and dressing percentage, U.S. bids were working back to the mid-$130s per cwt. f.o.b. the feedlot.

For the week of Nov. 2, more than 9,500 cattle were put on the set-aside program, the largest weekly volume since the program started. These fed cattle are scheduled to be released in January.

Western Canadian fed slaughter for the week ending Nov. 7 totalled 46,410 head, 30 percent higher than the same week last year. This is the fifth week in a row that fed slaughter has been above last year.

On top of big slaughter volumes, carcass weights are also larger. Western Canadian steer weights increased 23 pounds to average 971 lb., establishing a new record. Steer weights are 35 lb. heavier than last year, while heifer weights are three lb. larger.

The year-over-year increase in steer weights could be related to more beef cattle than dairy cattle in the slaughter mix, or more steers than heifers could be going on the set-aside program.

In Ontario, dressed sales were reported at $228-$231 per cwt. delivered, fully steady with the previous week. Cattle were being bought for the week of Nov. 30 delivery.

From January to September, Canadian beef exports are down 7.4 percent in volume and down two percent in value compared to last year.

In the United States, higher beef cut-out values and smaller show list volumes paved the way for higher fed prices last week. Dressed sales ranged from US$270-$274 per cwt., which was $7-$10 per cwt. higher than the previous week. Live sales in Texas and Kansas were reported from $110-$111 per cwt., $3-$4 per cwt. stronger.

Fed prices are at the highest point since early June. U.S. beef cow slaughter for the week ending Oct. 31 totalled 71,520 head, the largest slaughter seen this year.

Cows remain low

Non-fed prices averaged lower last week, but interest in slaughter cows strengthened after the Wednesday holiday. D2 cows eased $1 per cwt. lower than the previous week to average $68.21 per cwt., and D3s slid almost $3 per cwt. lower to average $57.17.

Dressed slaughter cow bids trended generally steady from $135-$140 per cwt. delivered. Butcher bull prices eased $1.38 per cwt. lower than the previous week to an average of $97.25 per cwt.

Profitable kill margins have kept packers focused on fed cattle slaughter, but non-fed slaughter has rebounded. For the week ending Nov. 7, western Canadian non-fed slaughter rallied 10 percent higher than the previous week to 6,459 head.

A significant volume of slaughter cows has moved through markets over the past three weeks, and slaughter cow prices seasonally softened. Slaughter cow prices appear to be testing bottom, and prices this week could strengthen on tightened supplies and keen interest for feeder cows.

Good feeder demand

Feeder cattle prices continued to firm higher last week with good demand observed on a modest offering. With the Remembrance Day holiday breaking up the trading week, cattle markets lacked seasonal momentum.

Calves and feeders less than 800 lb. saw prices firm $1-$2 per cwt. higher than the previous week, while large feeders heavier than 800 lb. traded unevenly steady. Replacement quality heifers heavier than 900 lb. were the exception last week, surging $3.50 per cwt. higher.

Auction volumes for the short trading week were significantly lower than the previous week and last year. Year to date, auction volumes are down 11 percent from the same week last year, totalling 1,221,182 head. Calf prices have been trading below year ago since early October, which has been a contributing factor for delayed marketings.

Reduced fourth quarter marketings are reflected in the Canfax Nov. 1 cattle-on-feed report, which indicates October placements of feeders were down 17 percent from one year ago. Increased forage stocks have also encouraged some calves to remain on the cow that may not be marketed until the new year.

Steer calves last week traded $7-$9 per cwt. lower than year ago, while Lethbridge feed barley for April delivery was trading $45 per tonne higher. With tax dollars to spend and ample silage stocks, feedlots would like to place a few more calves before year end.

Ontario calf prices continue at a premium to the prairie provinces, and eastern buying interest is expected to be price supportive.

U.S. cutouts higher

In U.S. beef trade, cut-out values rallied sharply higher last week with significant seasonal price improvements for middle meats. Choice averaged US $226.50 per cwt. and Select averaged $208.24. Good seasonal buying is expected to continue for middle meats, and colder winter weather should fuel demand for economy end cuts.

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