Western Producer Livestock Report

U.S. market climbs faster

Fed cattle price averages last week jumped $1.50 per hundredweight on steers and $1 on heifers, said Canfax.

Steers averaged $88.50 per cwt. while heifers averaged $87.34.

But the Canadian market failed to keep up with the rising U.S. fed market, fuelled by low feedlot placements in December and January and cold weather that has slowed weight gain.

The Canada-U.S. cash-to-cash basis widened to $17.93 under from $14.30 under the week before.

U.S. bound cattle saw higher prices than local bids.

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Two weeks ago, 21,439 fed cattle were exported.

Feedlots sold their entire show lists and will carry over no cattle into next week, said Canfax.

Alberta prices Feb. 8 were steers $87.80-$89.40 live and $148.35 rail grade. Heifers were $147-$148.50 on the rail with no live trade reported.

Canfax said the wide fed cattle basis continues to frustrate producers.

Applying an exchange rate of 85.23 cents to the Nebraska price of $90 yields a Canadian price of $105.60 per cwt.

Even splitting the difference between a historical $10 under basis and the current $17 under basis works back to better than $92 for the Canadian market, Canfax said.

Market ready numbers should be manageable for the next few weeks.

Beef climbs

U.S. Choice cutouts were $143.63 US, up $1.32, and Select $137.31, up $2.76, Canfax said.

The U.S. Choice-Select spread has narrowed to $6.32, down $1.44 from the week before and down $2.98 from last year.

Larger U.S. kills meant more beef in the pipeline, which likely helped moved the cutouts higher, said Canfax.

Canadian packer kills are steady with business moderate at best.

With higher prices in the United States, Canadian packers will likely have to increase beef prices to see profits, Canfax said.

The Calgary wholesale price for delivery this week was $3 Cdn higher at $145-$150.

Feeder prices rise

Auction market volume was 30 percent down from the week before and 39 percent below last year. About 29,000 head sold, Canfax said.

However, trade was strong with light weight 300-600 pounds up $1-$3.25 and 600-800 lb. up $1.75-$3.20.

Feeders 800-900 lb. and heavier were up $1-$3.

Factors behind the optimism in the feeder market are good U.S. buying interest and stronger fed cattle trade.

For the week ending Feb. 3, 12,508 feeder cattle were exported, up five percent from the week before and up 72 percent from the same week last year.

Butcher cows rose $1.50-$2.25, and bulls were up $1.25.

The stronger prices will likely draw more cattle to the markets. However, prices will continue to feel the pressure of rising feed costs, said Canfax.

Stock trade was strong with cow-calf pairs fetching $850-$1,150, bred cows $750-$1,000 with tops to $1,175 and plain types $300-$700.

Bred heifers were $850-$1,025, with plain types $650-$800.

Cold drives hog market

Another cold week forced packers to pay more to convince U.S. hog producers to deliver.

Some analysts expect that when warmer weather returns prices might dip as the hog supply that has been held back by weather is delivered.

But carcass weights are dropping due to the cold and high feed costs, leading some to believe marketings have been pulled forward, meaning marketings in coming weeks might be less than expected.

Smithfield announced it was temporarily suspending its second shift at the John Morrel plant in Sioux City, Iowa, because of tight hog supply, partly caused by cirovirus disease.

The Iowa-southern Minnesota live cash price for hogs delivered to plants was $48.50 US per cwt. Feb. 9, up from $47.50 on Feb. 2.

The U.S. composite pork carcass cut-out value was $70.53 per cwt. on Feb. 9, up from $63.83 Feb. 2.

Federal slaughter in the U.S. during the week was estimated at 1.95 million, down from 2.045 million the week before.

Bison make sales

Carcasses from top quality bison bulls in Canada younger than 30 months in the desirable weight range were steady at $1.65 to $1.85 Cdn per lb. with a weighted average of $1.74 per lb., said the Saskatchewan Bison Association.

Rail prices for quality youthful bulls older than 30 months ranged from $114-$145 per cwt. Cull cow prices were 10 to 15 cents per pound live weight.

Industry associations are optimistic about growth in domestic markets. Canadian bison meat marketers recently reported new sales for spring to two western Canadian restaurant chains and a major western food retailer, said the association.

The U.S. Department of Agriculture reported Jan. 10 that hot carcasses from bulls younger than 30 months were $170-$190 US, with an average of $182.23 during December, up $2 from the month before.

Heifers averaged $166.24.