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.

Little change on fed cattle

Alberta direct cattle sales last week saw light volume trade on a modest cash offering. Dressed sales were reported more than $1 per hundredweight higher than the previous week with the bulk of trade at $230 per cwt. delivered. Weighted average live steer prices were 75 cents per cwt. higher than the previous week. Most cattle marketed last week were scheduled for first half of January deliver, but a few cattle were added to the December kill.

U.S. buying interest was reported again last week, but the strengthening basis and the Canadian dollar were antagonistic and kept cattle local.

For the week ending Nov. 28, western Canadian fed slaughter slipped 17 percent lower than the previous week to 41,504 head, and year to date was down one percent totalling 1,910,704 head. Western Canadian steer carcass weights were 37 pounds larger than the same week last year, while eastern Canadian steer weights were 12 lb. lower. However, eastern steer weights averaged six lb. heavier than the west at 955 lb.

Moderate Ontario fed trade trickled in over the course of last week with the majority of sales reported at $232 per cwt. delivered. Ontario market-ready supplies continue to trend generally current, and most cattle last week were scheduled for two to three week lift.

Packers continue to maintain leverage with ample out-front supplies, and delivery dates are five to six weeks out. Excellent fall and winter feeding weather is pulling summer yearlings placed against January forward, and carcass weights through the fourth quarter continue to trend historically large.

The number of cattle accepted on the set-aside program for November is expected to total around 41,000 head and will be eligible for deferred slaughter in January. Market-ready fed supplies could tighten modestly, but the December harvest schedule is booked up.

In the United States, moderate trade was seen over the week with live sales in the south generally US$1 per cwt. lower than the previous week’s Texas average at $110 per cwt. Dressed trade in the north was reported $1 per cwt. either side of the previous week’s Nebraska rail average from $172-$174 per cwt. delivered.

U.S. steer carcass weights for the week ending Nov. 21 were reported seven lb. lower than the previous week at 923 lb. and 11 lb. heavier than year ago.

Stocker calf prices strengthened last week, while feeders traded unevenly $2-$3 per cwt. either side of steady.

Bunk replacement auction offerings will seasonally increase in the new year and dry pasture conditions could flush increased volumes to market through December. Increased offerings and higher feed costs are expected to pressure feeder prices lower.

Cow slaughter increases

For the second half of November, western Canadian cow slaughter has ranged from 7,500 to 8,000 head, the largest weekly slaughter since the end of March. Even though slaughter volumes have picked up, they are still averaging 3,000 head per week fewer than last year.

With lighter than normal supplies for this time of year, butcher cow prices traded fully steady through commercial auction facilities. D2s averaged $70.20 per cwt,. and D3s averaged $58.50 per cwt. Rail bids/sales were reported steady to a little stronger than the previous week.

Given larger slaughter numbers in Eastern Canada, Ontario cow prices continue to hold up quite well. Ontario cow prices are $6 per cwt. higher than last year and $2.25 per cwt. lower than the five-year average, while western Canadian prices are $11 per cwt. lower than last year and $16 per cwt. lower than the five-year average.

Anecdotally there seems to be a few more cows going onto feed this year than last year. Most of the cows that are being warehoused will come back onto the market during the first quarter of next year.

Auction volume rises

Some calves that would have traditionally been sold in October and November have started to show up in early December. Combined British Columbia, Alberta, Saskatchewan and Manitoba auction volumes are 13 percent larger than the same week last year. Eastern Canadian buyers have not been overly active on the western Canadian calf/feeder market, but buying interest has been noted on pre-conditioned calves.

Last week, calf and feeder prices trended generally steady. The forward delivery market was lightly tested. Alberta heifers based at 850 lb. for March delivery traded in the mid-$160s, steady with the previous week’s bids. Alberta 850 lb. heifer basis levels for March delivery were -$14.02. In 2020, March 850 lb. heifer cash to futures basis averaged -$18.26, and prices averaged $156 per cwt. From a basis and price perspective, this is not a bad selling option.

Alberta 450 lb. steers averaged $246 per cwt. ($1,107 per head) and 550 lb. calves averaged $215 per cwt. ($1,182 per head.) For an extra $75 per head, buyers get an extra 100 lb. of weight. With barley prices hovering around $6 per bushel, buying the additional 100 lb. of weight could be more cost effective than feeding that weight on.

Bred sales have been impressive with good interest on dispersal cattle and reputation bred heifers. Prices have picked up $100-$200 per head since the middle of November. Very few if any bred cows are going to slaughter, and lower quality bred heifers are still finding homes and are not going into feedlots.

Last week in Alberta bred cows traded from $1,300-$3,150 per head, averaging $2,030, and bred heifers traded from $1,600-$2,950 per head, averaging $2,130. Bred cattle prices are $230-$310 per head higher than last year.

Bred values have been supported by more plentiful feed than in the past few years. December is traditionally the strongest month for bred cattle, and this year will be no different. In Saskatchewan, bred prices are steady to a little lower than prices seen in Alberta. Most of the bred stock trading in Saskatchewan is staying in that province, but Ontario, Manitoba and Alberta buying interest has been noted at some sales.

U.S. cutouts trend lower

In U.S. beef trade, cut-out values traded seasonally lower last week. The Choice cutout slid almost US$6 per cwt. lower than the previous week, averaging $239.19, and Select eased $1 per cwt. lower to average $219.93.

Last week’s post-Thanksgiving U.S. cattle slaughter was estimated at 667,000 head, the largest since spring COVID slowdowns.

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