Western Producer Livestock Report

Pressure in fed market

The labour-management dispute at Lakeside Packers loomed over the fed market last week, but the week’s price averages were fairly steady.

Lower bids from packers early in the week saw feedlots dig in their heels.

Trade developed midweek with prices steady to 50 cents lower than the week before.

U.S. bids in Canada were generally steady with the week before, but the higher Canadian dollar depressed the net price.

In slow trade Sept. 22, Alberta saw steers at $82.75-$85.15 per hundredweight, flat rail $141 and heifers $82.75-$85.15, flat rail $140.

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Canfax said strong supply, slower beef movement and struggling cutouts will keep fed prices edging lower. But most feedlots are current in their marketings.

U.S. beef weakens

U.S. cutouts stepped back from their impressive price gains of two weeks ago, Canfax said. U.S. boxed beef movement was down 24 percent from the week before.

U.S. packer margins are in the red because they have had to compete strongly for the tight supply of Choice cattle and they are having trouble trying to keep wholesale beef in step with the higher cattle prices.

Choice and Select lost $1.60 US last week.

Canadian cutouts were expected to follow a similar path. The stronger loonie was also expected to pressure Canadian cutouts.

Beef buyers in Canada seem to be operating in a hand to mouth mode, said Canfax.

Calgary wholesale prices for delivery this week gained ground with steers at $145-$148, up $2 from the week before.

Feeders steady

Feeder cattle trade was generally steady on good buyer demand.

Near the end of the week some weakness appeared on the heavier end of the yearlings, likely due to the weakness in the fed market, said Canfax.

The change won’t be reflected in averages until next week.

Calf numbers are increasing.

Light steer calves less than 300 lb. rose $3 while the rest of the weight classes were steady.

Heifer calves were steady while anything over 600 lb. was $1-$3 higher. The week’s volume was seven percent larger than the week before but down 13 percent from a year ago. U.S. interest continues with 10,600 feeders exported during the week ending Sept. 17.

D1, 2 cows were $1.50 lower with D3s down $2. Butcher bulls traded steady.

The next few weeks will measure the demand for large calf numbers. Demand is expected to come from western Canadian, eastern and U.S. interests. The U.S. market will generally set the floor for the calf price, said Canfax.

With 50 lb. calf prices in the United States in the $120-$125 US range, this converts to $140-145 Cdn before transportation and costs.

Current local prices of $130-$135 suggest a $10 spread.

Yearling offerings will slowly dwindle heading into October, which should support prices.

Stock bred cows were $400-$800 with tops to $1,000 while bred heifers traded at $400-$800. A few pairs brought $600-$1,100 with most trade at $700-$1,000.

U.S. on feed

The U.S. Cattle on Feed report issued Sept. 23 saw the on-feed total about as expected. The 10 million head on feed number is about the same as last year and two percent larger than 2003.

The 1.99 million head placed in August was the smallest for the month since this series began in 1996.

Marketings at 106 percent of last year were slightly under analysts’ estimates.

Hog prices rise

U.S. hog plant margins edged lower during the week, but packers were forced to bid higher to get the hogs they needed for a brisk slaughter pace.

Packers killed about 2.1 million hogs last week, including Saturday slaughter, up from 2.03 million the week before and about equal to last year.

Chicago lean hog futures contracts mostly rose, pressured higher by the strong cash market.

The Iowa-southern Minnesota cash price Sept. 23 was $50 US per cwt., up from $48 on Sept. 16.

The U.S. Department of Agriculture composite pork carcass cut-out value Sept. 23 was $71.05, up from $70.88 on Sept. 16.

Canadian prices are suffering from the steadily rising Canadian dollar.

Ron Plain of the University of Missouri noted Sept. 23 that U.S. hog imports from Canada for January-July were down 9.5 percent. Feeder pig imports for the period were down 8.6 percent, and slaughter hog imports fell 11.6 percent.