Western Producer Livestock Report

Too much meat

Meat prices are under pressure because of heavy carcasses, slow consumption and weak U.S. chicken exports caused by overseas consumers worried about avian flu.

The result is rising meat stocks that are pressuring down prices for meat and livestock.

The strengthening Canadian dollar is making the situation worse for Canadian producers.

Fed cattle price drops

Fed cattle prices dropped through the week, Canfax said.

Averages for the week were down $2.77 per hundredweight on steers and $4.82 on heifers.

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The volume totalled slightly more than 25,000 head, up 34 percent from the week before.

U.S. bids were a little more attractive and more cattle headed south.

Alberta prices Feb. 2 in limited trade were steers $151 to $151.50 flat rail and heifers $151 flat rail.

In the short term, the market tone is expected to be similar to this week and feedlots should keep on top of increasing carcass weights, Canfax said. Steer carcasses are 28 pounds heavier than they were a year ago.

Beef prices fall

U.S. cutouts fell sharply as packers struggled to move product. The Choice cutout fell $4.84 US from the week before, while Select was $4.88 lower.

Western Canadian packers have reduced kills to cope with slow meat sales. Retailers are featuring pork and poultry, not beef.

The Calgary wholesale price for delivery this week for steers is $157 Cdn to $158, $3 to $4 lower than the week before.

Canadian federally inspected fed cattle slaughter so far this year has ranged between 37,500 and 49,500 head per week, about 50 to 65 percent of capacity.

Heavy feeders under pressure

Feeder volumes picked up slightly with a little less than 41,000 trading through Alberta auction markets, up 20 percent over the week before, but 23 percent smaller than the same week a year ago.

Steer and heifer calves traded steady to higher with wider price ranges noted due to quality, Canfax said.

Calves 400 to 700 lb. traded steady to $2 higher, with the exception of 600 to 700 lb. heifers trading $1 lower than the week before.

Heavier feeder cattle continued their downward trend with steers 700 to 900 lb. and heavier down 50 cents to $2.25. Heifers 700 to 900 lb. and heavier fell 75 cents to $2.75.

Demand for slaughter cows turned around late in the week, pushing averages $1 higher to $31.25. Butcher bulls also gained strength, gaining $1 to $30.50.

The lower fed market and the strong dollar will pressure heavier feeder cattle prices, said Canfax.

Buyers will want to buy feeder cattle cheaper because the summer finishing market looks weak. Calves on the other hand are expected to trade steady to stronger on good demand.

With the volume of slaughter cows through auction markets slowing and packers trying to offset some of their smaller fed kills with non-fed animals, D1, 2 cows are expected to trade steady to stronger for the near term, Canfax said.

Stock bred cows mostly traded at $600 to $1,200 with tops to $1,300. Bred heifers brought $700 to $1,300 with tops to $1,460. Cow-calf pairs in central and northern Alberta were $575 to $1,100.

Pork and hogs fall

U.S. cash hog prices were pressured by limited packer demand, weak cash pork values and heavy carcasses. Some pork plants planned to reduce slaughter rates this week from the recent high levels in response to ample pork supplies and slumping prices.

Carcasses are running about four lb. heavier than they were at the same time last year.

The composite pork carcass cut-out value fell to $56.48 Feb. 3, down from $58.53 Jan. 27.

The Iowa-southern Minnesota live cash price for hogs delivered to plants dropped below $39 US early in the week but firmed to $39-$39.50 per cwt. by Feb. 3, down from $40 on Jan. 27.

Federal slaughter in the U.S. was estimated at 2.03 million, the same as the week before, but up from the 1.98 million slaughtered in the same week last year.