Livestock Report

There was no Canfax report last week because of the holiday.

News of the United States plan to open the border to cattle younger than 30 months is reported on the front page of this issue Also, Canada confirmed Jan. 2 another BSE-positive cow, this time an older dairy cow in Alberta. The announcement is not expected affect the U.S. decision to resume limited live trade March 7.

At the Chicago Mercantile Exchange, February live cattle futures were trading at $88-$89 US per hundredweight on Jan. 3, up from their previous close.

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For the week before Christmas, Canfax reported that fed cattle were $4.50-$4.75 Cdn per cwt. higher on average.

The Canfax statistics were up to Dec. 22, a day earlier than normal because of the holiday.

Volume was up five percent from the week before with more than 18,000 head selling.

The stronger prices drew out sellers and packers were willing bidders.

“More of the cattle sold were showing fewer days on feed, which will reflect in softer yields,” Canfax said.

Alberta prices Dec. 22 were steers $85.40-$88.85, flat rail $146-$149 and heifers $86.15-$88.85, flat rail $147.50-$148.

The Alberta set-aside program offered a $20 basis during the week, the narrowest so far. Jan. 12 will see the first of the set-aside cattle available for re-sale from the original starting date in October.

In the week of Dec. 13-17, Canadian cutouts were mostly lower despite the weaker Canadian dollar, said Canfax.

The light AAA was steady but the other cutouts were $1-$2.65 lower.

Packers reported slow beef movement.

U.S. cutouts gained $1.50 US on Choice and Select because of retail fill-in buying heading into the holidays.

Calgary wholesale beef was lightly traded with prices at $144-$145 Cdn. Canfax expected packers would want as much as $6-$7 per cwt. more the next week due to the higher cash trade.

Most feeders steady

Feeder cattle prices were mixed the week before Christmas due mainly to quality and offering, said Canfax.

The lighter calves saw some price pressure and selective bidding with prices for under 500 lb. calves $1-$3 per cwt. lower.

Other weight classes were mostly steady. More than 34,000 head traded, down 39 percent from the week
before.

A smaller offering of cull cows held mostly steady.

The rally in the fed market was expected to support short-term feeder cattle prices, said Canfax. Many feedlots will want to replace pens of yearling cattle and the border announcement will help with industry optimism.

Bred cows were under pressure with reduced buying interest. Average bred cows were $500-$800 with tops holding at $1,250 on limited trade. The bottom end was $320-$400.

Average to top quality heifers were $700-$1,000, with tops to $1,300 and bottoms at $320. A few pairs brought $550-$890, said Canfax.

Hog report bullish

The Manitoba Agriculture hog report is unavailable this week.

Ron Plain of the University of Missouri noted that the U.S. Department of Agriculture Dec. 1 hogs and pigs report issued Dec. 28 was substantially more bullish than trade estimates.

The population of hogs and pigs on farms Dec. 1 was estimated at 60.5 million, almost identical to the number a year earlier. The trade has expected the herd would be 1.5 percent larger.

The breeding herd, at a little more than 99 percent of 2003, was nearly two percent below the trade estimates, and the market herd at 100 percent of a year ago was also about 1.5 percent below the trade estimates.

The report propelled Chicago hog futures sharply higher.

Plain noted news reports of declining interest in low carb diets.

“However, we cannot identify any slippage in the demand for live hogs through November. The drop in prices in the first three weeks of December was quite large, but the prices at the low in December were about what most people expected as late as October.”

He said the rally at the end of December adds confidence to the belief that demand is still strong for hogs and pork and that prices in 2005 will be similar to 2004.