Deadline spurs business
Fed cattle trade was quiet last week because of the large amount of business done the previous week to meet the deadline for the federal bovine spongiform encephalopathy assistance program.
Most of the volume reported in the Canfax average came from sales Aug. 15 and 16.
Some light trade occurred late in the week after it was determined that the program’s Aug. 31 kill date was the determining factor in triggering the deficiency payment. As long as cattle are processed by Aug. 31, they qualify for a payment.
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Plants that weren’t completely bought up were able to do more business at prices around $35 per hundredweight.
Beef moved well through the system in Canada, especially the drastically lower-priced end meats.
Kills shot up to almost 64,000 head two weeks ago, more than double the pace of May and June. Good packer profits are enticing them to process aggressively, said Canfax.
Work continued on the details of the U.S. import permit program. It appeared all trim products done by hand from cattle less than 30 months of age can be exported south.
The United States also appears to be holding firm for now on the decision to allow exports only from fed steer and heifer plants, not plants that also handle non-fed slaughter cows and bulls.
In the U.S., cutout prices slipped a bit even though cash cattle prices were stronger.
The Choice and Select cutouts dropped slightly more than $2 US but remain 22 percent higher than the same time last year.
Canfax said the market this week would be influenced by the new Alberta assistance program announced Aug. 22.
Fed cattle supplies are expected to tighten in September as most of the cattle set aside under the federal program will go to market in late September and early October.
This, combined with the fact that boneless beef and trim from cattle less than 30 months of age will start moving into the U.S. after Sept. 1, should mean higher fed cattle prices.
Feeder sales increase
The volume through Alberta auction markets increased by 37 percent last week, with about 7,000 head trading. However, this is down 86 percent from this week last year.
Feeder steers and heifers of all weight ranges remained strong.
Steers 300-700 pounds traded above $100 Cdn per cwt., which was $2.50-$9.50 higher than the week before, but $13.25-$28 lower than last year.
Steers 800-900 lb. and heavier traded $2.75-$3 per cwt. higher than the week before and $14.50-$14.75 lower than last year.
Feeder heifers were not as strong as the steers, but all weight ranges were $1.50-$10.25 higher than the week before, but $13.75-$26 lower than last year.
The Aug. 15 satellite sale was also strong with feeder steers 800-900 lb. and heavier trading at $91-$96.75 and heifers of the same weight range at $89-$94. D1, 2 cows traded a dollar lower.
Canfax said there was speculation among buyers that the trend of feeder cattle prices holding stronger than the fed market might continue in coming weeks.
Feeders might start to go to market because of dry pasture conditions.
Yearlings and heavier cattle may remain strong as cattle feeders start to anticipate tight supplies.
There was no trade for bred cows and heifers.
Cow-calf pairs ranged from $650-$1,170, with most at $920.
Pork prices lower
Wholesale prices for almost all pork primal cuts except hams declined, lowering the U.S. pork cutout value by more than $2 US per cwt.
American analysts attribute the lower pork prices to higher U.S. pork production and more pork from Canada than expected, said Manitoba Agriculture.
U.S. pork production has not declined by as much as projected earlier because hog slaughter has risen and carcasses are heavier. The increase in hog slaughter is attributed to the rise in hog imports from Canada.
According to USDA data, hog producers are expected to receive 12-14 percent higher prices for their hogs in 2003, while retail pork prices could be one percent lower than in 2002. It appears that packers are caught in a cost-price squeeze.
The Iowa-Minnesota daily direct hog price (plant mean, 51-52 percent, lean carcass converted to live weight) decreased from $43.15 per cwt. on Aug. 18 to $40.97 on Aug. 21.
On average, the week’s U.S. hog price was seven percent lower. However, lean hog futures prices for all months increased.
