Cattle prices fall $2
Lower fed cattle prices in the United States due to poor sales, little demand for beef and lots of market-ready cattle caused prices in Canada to drop.
The Canadian average was down $2 per hundredweight from the previous week.
The strength of the Canadian dollar also hurt prices.
Prices Feb. 5 were steers $80-$84 per cwt. and heifers $80.75-$83.35.
Wholesale beef prices are expected to be down $2-$3 per cwt. to $171-$172 in Montreal. Beef movement has been slow as buyers wait to see how low prices go.
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Canfax says because futures prices have been significantly higher than cash prices, U.S. feedlots have held off selling cattle, leading to a buildup of market-ready animals.
Canfax’s outlook this week is for prices in the mid $80s.
Some U.S. packers have reduced slaughter to try to reduce the amount of meat available and drive up prices. Some analysts believe buyers will soon be forced back to buying to rebuild supplies and packers will be able to pick up the pace.
The weakness in the fed cattle market hurt the feeder business.
Prices on some weights fell by $10 per cwt. But feedlots are still looking for bargain priced cattle.
Canfax expects prices for heavier feeders will continue under pressure in the short term.
In the stock cow trade, volume was up slightly last week. The bulk of the bred cows sold at $800-$1,100 and bred heifers were mainly at $900-$1,000.
On the export front, although South Korea’s financial problems could mean reduced purchases of beef overall, the fact that Canadian and Australian currencies have weakened compared to the U.S. dollar means there is a good chance these countries could grab market share from the Americans.
Hog prices fall too
Canadian hog prices dropped about eight cents a kilogram through the week, in step with falling U.S. prices.
In the U.S., average hog market weights have declined slightly, but remain about four pounds heavier than this time last year. Manitoba Agriculture says that with ample supplies of pork still available, U.S. packers have little incentive to raise hog prices.
Futures prices on the Chicago Mercantile Exchange also fell during the week in response to the weaker cash market, but U.S. analysts and futures traders expect prices to climb to the mid-$40s per cwt. (U.S.) by late spring.
There are indications that U.S. pork exports could increase. United States Department of Agriculture has provided credit to South Korea to buy meat as well as other commodities. And although the Japanese yen is still below its level last fall, it has strengthened since the beginning of 1998, which has improved export demand.
