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.
Feedlots still in the red
Averaging in the mid $170s per hundredweight for the past seven weeks, fed prices continued to hover near annual highs last week. For the second half of July, this is the second highest price on record.
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Despite historically strong prices, feedlot margins remain in the red. Based on the latest Canfax Trends report, steer and heifer calves placed in October and sold in July had on-average margins of negative $325 per head. Yearling steers and heifers placed in January and sold in July had on-average margins of negative $190 per head.
Given ample fed cattle supplies, competition on the cash market was limited. Packers were once again limiting the number of cattle bought from each producer. Last week dressed sales were reported from $292-$293 per cwt. delivered. Lift dates were reported anywhere from the week of Aug. 1 to Aug. 29.
Though western Canadian fed slaughter has been below last year in four of the past five weeks, Canadian slaughter cattle exports (fed cattle/cows) to the United States have been strong, offsetting reduced slaughter volumes in Western Canada.
In Ontario, most dressed sales were reported from $306-$308 per cwt. delivered, $5-$7 per cwt. lower than the previous week. From their highs in June, fed prices have dropped almost $8 per cwt.
Canadian beef exports for May were three percent lower than last year. So far this year the top two markets for Canadian beef are the U.S. and Japan. These two countries account for 82.7 percent of total exports compared to 80.2 percent last year.
In the U.S., dressed sales in Iowa and Nebraska ranged from US$225-$232 per cwt. Live sales in Nebraska ranged from $140-$142, steady to $3 per cwt. lower. Sales in Texas and Kansas were steady to $1 per cwt. weaker, ranging from $135-$139.
Feeders strengthen
Stronger prices were seen across the board last week for feeder cattle. There were big jumps on heavy weight steers of 800-900 pounds, which were up $9 per cwt., and steers heavier than 900 lb. were up $5 per cwt. For heifers, greater strength was seen for mid-weights with 500-700 lb. animals up more than $8 per cwt.
Lower feedgrain prices supported the feeder market. Lethbridge barley prices have dropped 11 percent over the last five weeks. Alberta 850 lb. steer prices increased 6.2 percent over this time, and 550 lb. steer prices increased 1.7 percent.
U.S. feeder prices are the strongest since 2015. In June, Alberta 550 lb. steers were at a C$10.15 per cwt. discount, and 850 lb. steers were at a $3.59 per cwt. discount to the U.S. Stronger prices stateside will keep feeder cattle moving south and limit imports. U.S. market strength could pull up the Canadian feeder price.
Feeder exports to the U.S., at 1,856 head for the week ending July 9 were down one percent from the same week last year.
Cow slaughter rises
Canadian cow slaughter is up four percent year to date with the West up one percent and the East up 15 percent from last year. Alberta D2 cows were up $3.50 per cwt. and were $24 per cwt. above last year, as of last week. D2s averaged $110.50 and D3s averaged $98.50.
While cow prices typically decline 16-21 percent from June through November, prices have stayed strong into July. The premium on U.S. utility cow prices over the Alberta market shrunk in recent weeks. As U.S. cow prices slide lower, they are expected to pull the Alberta market down with them.
Ontario cow prices have started to soften and are down seven percent from the peak four weeks ago. Ontario cow prices remain $24 per cwt. above last year and on par with 2014 levels. Butcher bull prices were down $3.11 per cwt. last week, averaging $131.25, but remain $17.80 per cwt. above last year.
U.S. cutouts steady
In U.S. beef trade, Choice cutouts ended the week steady with last week at US$267.76 per cwt. Select cutouts were down $1.38 per cwt. from the previous week at $240.53. Choice cutouts are trading one percent stronger than last year and 22 percent stronger than the five-year average. Select cutouts continue to trade weaker, down three percent from last year but 17 percent stronger than the five-year average.
