Market uneasy
The anticipated wall of fall calves is creating a jittery market because the large supply is expected to exceed packers’ ability to process in a timely manner this winter.
Announcements of increasing packer capacity on July 27 were received well by industry, but actual expansion is not expected to take effect until 2005, providing no relief for this year’s oversupply.
In addition, fall pricing for the new crop is hard to predict. Canfax forecasts a volatile, fragile market depending on individual feedlot margins. Serious losses among feedlot operators have left them cash poor and many may not have enough money to purchase feeders at favourable levels.
Read Also
Canola support gets mixed response
A series of canola industry support measures announced by the federal government are being met with mixed reviews.
July feedlot placements are down 11 percent for the same time in 2003, and 22 percent down from 2002. Canfax reports the most recent numbers show 762,000 head in Saskatchewan and Alberta feedlots. The lower placement trend could continue into the fall as producers with ample feed elect to keep calves at home.
Finished steer offerings were light and bids were soft because packers have enough inventory purchased for the next couple of weeks. Good quality steers traded steady at $65-$71.25 while heifers ranged from $64-$70. Rail grade was $1.10-$1.16.
Carcass weights are manageable at an average 790 pounds, down from last year at this time when dressed weights were 810 lb.
For the week ending July 24, Canadian packers killed 74,883 with 52,400 processed in Alberta. This is up about 20,000 from the same week in 2003.
Retail beef prices reached their highest level to date at $11.93 per kilogram in June according to Statistics Canada.
Wholesale beef prices are the same as last week. Boxed beef price for AAA ribeye was $6.55 per lb. while AA striploin was $6.28. Lean trim was $1.52.
Low volumes of feeders were offered with only 8,500 passing through Alberta markets. Fewer than 4,000 moved through Saskatchewan and Manitoba auctions. No trade was reported for British Columbia. This trend is expected for the next several weeks.
Steers in the 500-600 lb. range averaged $91.56 while 800 lb. cattle averaged $88.22.
Good D1, 2 cows came in at $16-$24.50 and bulls were $15-$20.
U.S. market steady
On the American side, markets are steady to light but when comparing prices to the Canadian side, offers for cattle are highly favourable.
The cash spread between Calgary and Nebraska was $46.95 Cdn and $47 between Calgary and Washington.
Finished steers in the Midwest ranged from $84-$85 US per hundredweight with sellers refusing to accept less than $84.
U.S. slaughter last week was 633,970 animals.
Steers in the 800 lb. range traded around $115 per cwt., which is 29 percent over last year’s offers and 35 percent above the three year average price. Breakevens are about $89 per cwt.
Other livestock
Canadian hogs were down $1 over the week before with 100 index hogs in Manitoba at $185 Cdn and Ontario, $188. Saskatchewan reported $176. Weekly cash prices continue to run steady to higher. Iowa offered $198.
Lambs in the 110 lb. range fetched $32.78-$52 in Toronto. Sunterra Meats in Alberta paid $40-$50 for the same weight.
