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.

Western Canadian fed cattle prices were up last week, rising $2.32 to $139.42 per hundredweight for steers and $2.27 to $138.23 per cwt. for heifers, and finally breaking out of a holding pattern.

December is traditionally a strong month in the fed market. Five-year averages show rallies of $11 per cwt. through the month.

Last week prices broke out of a 22-week trading range to trade higher. Steer prices established a new second half high, marking the fifth year in a row that this was reached in December.

Still, the high is off the $157-$165 per cwt. range seen in those last five years.

Competition in the cash market was supportive, and dressed sales were $233-$234 per cwt. delivered.

Cattle were scheduled for delivery the weeks of Dec. 28 and Jan. 4.

Alberta fed prices have gone back to a premium to the U.S. market after trading at a discount most of the fall.

Slaughter rates continue to impress, and packers are running Saturday shifts. Slaughter to Dec. 5 was 47,512 head and is the largest fed slaughter in more than 20 years for early December.

Ontario slaughter was down due to COVID-19 issues at one major plant, and this will continue as employees go through quarantine.

Light trade to a smaller packer was steady at $232 per cwt. delivered.

In the United States, trade was scattered with dressed sales in the north ranging from $166-$169 per cwt., or about $5 lower than the previous week. Live sales were also softer.

Choice cut-out value was $214.59 per cwt., down $24.50 from the previous week, while select cut-out value was down to $198.47 per cwt. off $21.50.

Values collapsed on seasonally slow demand, wholesale price resistance and tighter COVID-19 restrictions for food service.

Total U.S. slaughter was modestly lower than the previous week at 665,000 head. Reduced demand is anticipated for middle meats for the rest of the month.

On the non-fed side, cull cow prices trade sideways last week. D2 cows ranged from $65-$78 per cwt. while D3 cows traded from $50-$70 per cwt.

Butcher bull prices slipped more than $4 to average $95.44 per cwt. Prices for all non-fed cattle are expected to firm in January.

Feeder cattle prices eased moderately lower on a seasonal offering. Light Alberta calves less than 400 pounds traded $5.50 per cwt. lower on varied quality, while similar calves in Saskatchewan and Manitoba slid more than $8 per cwt.

Steer calves weighing 500-600 pounds were mostly steady.

The most obvious price discrepancy in Canada last week was Alberta feeder steers heavier than 700 lb. trading steady while same-weight Ontario steers were $5 to $12.50 per cwt. lower.

Alberta auction volumes were 26 percent lower than the previous week at 41,482 head but four percent higher than the same week last year.

Feeder exports to the U.S. were steady at 1,981 head and significantly larger year-over-year. Year-to-date, feeder exports were 39 percent below a year ago at 110,686 head.

Feedlot managers are reluctant to aggressively place new cattle because of high feeding costs and the rising Canadian dollar.

Minimum year-end tax dollars may have been spent, but there is mounting pressure to increase on-feed inventories to fill future scheduled formula market requirements. Calf prices through December are expected to be steady as buyers chip away at orders.

Some cow-calf producers are fighting the market, and delayed trading is reflected in lower year-to-date auction volumes and two months of lower feedlot placements than last year.

Bred cow prices ranged from $1,325-$2,700 per head, while bred heifers ranged from $1,700 to $2,900.

U.S. beef production for 2020 is record large, despite challenges. Cattle on feed numbers are also record large, but the U.S. Department of Agriculture is projecting first quarter production to be lower than last year.

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