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.
Fed supplies ample
Alberta fed prices firmed $1 per hundredweight higher last week on modestly improved competition, but ample slaughter supply continued to limit volume. Most sales were reported from $274-$275 per cwt. delivered. Thin live steer trade was reported at $162.50 per cwt. Heifer sale volumes were slight with prices comparable with steers. Most cattle traded last week were scheduled for harvest the week of April 4.
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Western Canadian fed slaughter for the week ending Feb. 26 was down one percent from the previous week to 42,031 head, and year-to-date volumes were two percent larger, totalling 329,531 head. Canadian fed cattle-cow exports to the United States for the week ending Feb. 19 were two percent larger than the previous week at 11,197 head and year-to-date volume is four percent larger, totalling 73,245 head.
Ontario trade saw dressed sales in a tight $289-$290 per cwt. delivered trade range.
Record numbers of U.S. cattle on feed resulted in the over-bought cattle futures moving lower last week, pressuring cash prices lower. The cash-to-cash fed basis strength will further limit U.S. buying interest and Canadian fed cattle exports.
Large harvests through March should work through the slaughter inventory backlog, but captive Alberta packer inventories are reported to the end of April and could limit the upside.
In the U.S., record cattle-on-feed inventories and softer cash cattle prices contributed to a significant cattle futures correction last week. Light trade developed in the south with prices US$1-$2 per cwt. lower than the previous week, marked at $140 per cwt.
Northern live sales were reported from $140-$143 per cwt. and were expected to average around $3 per cwt. lower than the previous week at $140.50.
Cow numbers drop
Statistics Canada released its Jan. 1 inventory report last week, showing beef cow numbers were down 0.9 percent to 3.5 million head. This is the fourth consecutive year the beef cow herd has declined. There was also a four percent decrease in breeding replacement heifers at 517,300 head. This decrease is a stark reversal from the 2.8 percent increase reported last year. The lower total breeding herd inventories reflect the drought and culling decisions in 2021.
The non-fed market has been the star of the slaughter cattle market lately, with prices strengthening at a faster rate than fed cattle. Over the past four weeks butcher cow prices have increased $11.50 per cwt., going from the upper $70s to the low $90s per cwt. D2 cows averaged $90.92 per cwt. last week and D3s averaged $78.90.
Non-fed volumes through commercial auction facilities are tightening, and slaughter volumes have also started to moderate. Alberta cow prices are still the cheapest in North America. The last time first-half-of-the-year highs were established in March was in 2005, suggesting there is upside potential. Cow slaughter volumes in the U.S. have been historically large, yet cow prices have been trading at the highest levels since November 2015.
Feeder price weakens
The feeder market saw price declines in Saskatchewan and Manitoba. Alberta 550-pound calf prices traded at a $20 per cwt. discount to the U.S., the largest discount since summer 2015.
Canadian feeder cattle exports to the U.S. totalled 10,157 head, the third largest weekly export volume in the past five years. With larger feeder cattle exports in recent months, packers might have to strengthen basis contracts. The forward delivery market was lightly tested, and prices for yearlings coming off grass are historically strong.
Last week Alberta, Saskatchewan and Manitoba 1,000 lb. heifers for September/October delivery traded from $190-$197 per cwt. with a weighted average price of $194.05 per cwt. Forward delivery prices for late summer and early fall are now 19 percent higher than current cash prices. Based on the five-year average (excluding 2020, including 2016) the average increase from first-half-of-the-year lows to second-half-of-the-year highs is 22 percent.
Cutouts continue slide
In U.S. beef trade, lacklustre late winter demand and wholesale price resistance continued to move cut-out values lower. Compared with sharp declines seen the previous week, Choice eased $5 per cwt. lower to average US$254.35, and Select saw a $6.76 per cwt. week-over-week decline to average $247.79.
