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.
Beef demand good
Beef demand and prices have been solid even given larger production. Year to date 2023 Western Canadian fed beef production is nine percent larger than last year, while year to date fed cattle prices are 18 percent higher than last year. With more beef being produced at higher prices, this is a positive story for the Canadian beef industry. Competition on the cash market was decent last week, with both major packers buying cattle. U.S. packer interest was limited and no cattle were marketed south.
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Dressed sales were reported from $317-$320 per hundredweight delivered. This is the sixth week in a row that fed prices have strengthened. Alberta fed cash-to-cash basis, albeit historically weak, has strengthened since the start of the year. Basis levels are the strongest since late September.
For the first three weeks in January, Western Canadian fed slaughter averaged 41,794 head per week compared to 38,353 head/week last year. Slaughter volumes have been strong to start the year, but Canadian fed cattle exports to the U.S. are running below last year. Fed cattle and cow exports for the first two weeks of January are 16 percent lower than last year.
Over the past three weeks, Canadian Prime grade percentage has ranged from 5.5-6.5 percent. For the month of January this is the highest percentage on record. The three-year average Prime grading percentage for January is closer to 4.5 percent.
In Ontario, sales volumes were too light to establish a weighted average price, but the market tone was steady. Dressed bids/sales were reported at $328 per cwt. delivered.
In the U.S., snow and cooler temperatures continue to impact central regions. Sellers, especially in the northern states, seem motivated to get cattle sold as performance has been affected.
Last week dressed sales in Iowa and Nebraska ranged from US$245-$248 per cwt., steady to a couple dollars lower than the previous week. Live sales in the northern feeding states ranged from $152-$155 per cwt., steady with the previous week. Live sales in Texas were at $156 per cwt., $1 per cwt. stronger.
Cow price strengthens
Non-fed prices strengthened last week on large harvests and tightening supplies. Slaughter cows at auction traded $1 per cwt. either side of steady. Alberta D2s saw a premium to Ontario, averaging $100.92 per cwt. and D3s traded over $5 per cwt. higher to average $87.30. Dressed cow bids firmed modestly to around $200-$205 per cwt.
Butcher bull prices slipped $3.63 per cwt. lower than the previous week to average $122.94 per cwt. Butcher bull prices averaged more than $23.50 per cwt. higher than the five-year average, but should rebound higher on continued strong demand for trim and grind. Front-end slaughter cow supplies should begin to tighten.
U.S. cutouts weaken
In U.S. beef trade, cutouts closed the week weaker, with Choice down a slight one percent to US$268.75 per cwt. and Select down 1.6 percent to $251.48.
Beef cutout values are trending down to begin the year, when they have historically been sideways in the first quarter.
Feeders steady
Feeders traded generally steady last week on seasonally ample offerings. With an anticipated limited supply of grass yearlings for the third quarter 2023, keen interest was observed for light grass type steer calves less than 500 pounds and prices rallied over $3 per cwt. higher.
Steer calves from 500-600 lb. have traded either side of $300 per cwt. throughout January. The last time these benchmark steers traded over $300 was in September 2015.
The January 500-600 lb. steer/heifer price spread is the widest since reporting began. At $52.94 per cwt., last week’s spread is 113 percent wider than September 2015. With nearby barley trading almost 100 percent higher than September 2015, it is easy to see why feedlots have focused buying interest on steer calves rather than poorer converting heifers.
The 700-900 lb. feeders saw a modest premium for deferred delivery last week. Weekly auction volumes were 17 percent larger than the previous week and were eight percent larger than the same week last year at 39,607 head.
Canadian feeder exports to the U.S. for the week ending Jan. 14 were 28 percent lower than the same week last year at 2,110 head.
