Fed cattle halt slide
Fed cattle prices showed signs of stabilizing last week after dropping $14 per hundredweight since June. Prices are within $5 per cwt. of challenging annual lows set in January.
Even with record high feedgrain prices, cattle continue to come in bigger than expected. For the week ending July 24, western Canadian steer carcass weights averaged 885 pounds. For the second half of July, this is the second largest carcass weight on record. It was larger only in 2016.
Cattle supplies are being worked through in a timely manner as packers seem to be operating at or slightly above plant capacity. Saturday shifts are also being used.
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Last week, dressed sales were reported from $250-$254 per cwt. delivered. All three western Canadian packers procured cattle but competition on the cash market was limited. Cattle were being scheduled anywhere from mid to late August through early September delivery.
Alberta fed prices have been at a discount to the U.S. market for the past four weeks, averaging -$2.16 per cwt. against Nebraska for July.
In Ontario, dressed sales ranged from $258-$265 per cwt. delivered but most of the sales were at $258-$260. Cattle were being booked for immediate to mid-August delivery. In the past five weeks, eastern Canadian fed slaughter has averaged 10,005 head per week compared to 10,428 head per week last year.
Based on the five-year average, fed cattle prices decline each week from now until the middle of September. From January to June, Alberta and Saskatchewan cattle-on-feedlot placements are up 24 percent from last year. U.S. feedlot placements over that same time are up six percent.
In the U.S., dressed sales in the north ranged from US$195-$201 per cwt., fully steady with the previous week. Live sales in Nebraska ranged from $121-$123 per cwt., $2 per cwt. lower than the previous week.
For the week ending July 17, U.S. beef cow slaughter totalled slightly more than 68,000 head, seven percent larger than last year and 18 percent larger than the five-year average.
Cow prices pressured
Non-fed cattle volumes at auction remain elevated for this time of year, but many auctions reported lower numbers than the previous week. Most of the cull cows have likely been sold and it may still be too early to split other pairs for culling.
Cows through the ring last week were again under pressure. Demand was moderate, but the western Canadian cull market did see support from U.S. buyers as cow exports have picked up. D2s averaged $82.08 and D3s averaged $71.88 per cwt. last week.
Western Canadian cow slaughter was 6,131, down 900 head from the previous week but still more than 800 head higher than the five-year average. Without rain, culling will increase in August and ample fed supplies will likely limit local packer demand for cows.
More feeders move
Auction volumes for feeders increased as a shortage of grass and water has many producers looking to move cattle off pasture early. Last week’s auction volume was well above a year ago, but part of this is related to an increase in electronic sales for both spot and forward delivery sales.
The feeder market continues to hold nearly steady as demand remains strong despite increased volumes. Ontario buyers supported the market last week on yearling cattle and calves for fall delivery.
A few more feeders have headed south, but volumes are limited. Feeder cattle imports from the U.S. are also expected to slow.
Lethbridge barley prices are hovering near $9 per bushel, but feeder prices remain well above a year ago and above the five-year average. They are supported by the strong 2022 spring cattle futures and a Canadian dollar near 80 cents.
Demand for yearlings is anticipated to remain stout, but the seasonal increase into fall will likely be muted given the uncertainty about feed supplies and prices. Barley prices have stabilized as feedlots look to corn or wheat to meet feed needs.
Cut-out value rises
In U.S. beef trade, Choice and Select cut-out values closed at US$9.08 and $7.05 per cwt. higher, respectively. Choice averaged $275.22 and Select averaged $256.82 per cwt.
Based on weekly export data, beef sales over the past two weeks have seen some of the largest volumes this year.
