Canfax report

This cattle market information is selected from the weekly report from Canfax, a division of the Canadian Cattle 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 prices soften

Alberta fed steers and heifers continue to trade softer, hitting the lowest point since early April. In January, prices were 16 per cent stronger than a year ago, but that year-over-year gain shrunk to five per cent last week.

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Dressed sales were reported from $405-$411 per hundredweight delivered. The Alberta cash-to-futures basis was reported at +$2.24 per cwt., $4.29 per cwt. stronger than the previous week and $6.04 per cwt. stronger than the five-year average. For the week ending Aug. 31, western Canadian steer slaughter was 30,435 head, up 11 per cent from last year and six per cent above the five-year average. During the same week, western Canadian steer carcass weights were 958 pounds, up 27 lb. from last year and 49 lb. above the five-year average.

Western Canadian heifer slaughter continues to drop. At 12,049 head, it was down 18 per cent from last year and two per cent below the five-year average for the same week.

For the week ending Aug. 24, Canadian fed cattle and cow exports to the U.S. totalled 9,724 head, up 24 per cent compared to the same week last year. Year-to-date fed cattle and cow exports total 359,170 head, running well above last year at 21 per cent.

In Ontario, dressed sales were steady with the previous week at $408 per cwt. delivered.

Expect heavier carcass weights through to the end of the year.

In the United States, light trade in Texas and Kansas at US$181 per cwt. was $2.50 per cwt. lower than the previous week’s weighted average. Light sales in the northern feeding states were $181 per cwt. live, and $286-$288 dressed, $1-$3 per cwt. lower than the previous week.

In August, medium and large frame 850 lb. feeder steer prices in North and South Dakota averaged one per cent softer than last year, ranging from $246-$248 per cwt. Same weight steers in Montana were one per cent higher than last August, averaging $245 per cwt. Heavyweight 950 lb. feeder steers were two per cent softer than last year in the Dakotas ($237-$368 per cwt.) and two per cent stronger in Montana ($231 per cwt.

Year to date, U.S. cattle imports are up 23 per cent from last year; feeder cattle imports are 22 per cent higher and slaughter imports are 23 per cent higher. Year-to-date cattle exports are two per cent higher than last year, up eight per cent to Canada but down 49 per cent to Mexico.

Cows trend lower

The non-fed market exceeded expectations this summer, topping out in the mid 190s per cwt. Price highs are behind us and a lower trending market is expected from now until late fall.

Last week, butcher cows traded $3-$5 per cwt. lower through commercial auction facilities. D2s averaged $185.86 per cwt. last week and D3s averaged $169.95. Butcher bulls averaged $208.75 per cwt.

Feeder cow buying interest has moderated, while packer demand continues to be strong. Alberta cow prices are trading at a slight premium compared to the U.S. market. For the week ending Aug. 31, western Canadian cow slaughter totalled slightly more than 4,400 head, 34 per cent below last year. For August, this is the smallest cow slaughter volume since 2012.

Based on the Statistics Canada inventory report, on July 1 Alberta beef cow inventories were the smallest since 2015, while Saskatchewan beef cow numbers were the smallest since 1993.

Across most of the Prairies, the feed and forage situation is better than last year, which should keep cows out of the slaughter mix this fall.

Fall run to come

The yearling run will soon be in full gear, but auction numbers continue to be fairly light. With heavier weight feeder prices dropping $15 per cwt. over the past month, many could be waiting for a price bounce.

September is traditionally a strong time for yearlings, when prices usually establish annual highs. It is rare to see prices decline from August to September, and it has only occurred three times (2009, 2013 and 2016) over the past 15 years.

Despite corn prices hovering near four-year lows, the feeder market is under pressure. Weakness in deferred live cattle contracts has pressured feeder cattle contracts. Since early July, feeder cattle contracts have declined more $30 per cwt., establishing new contract lows last week. Lower calf and feeder prices are anticipated.