The livestock industry faces a tough year with increased supplies of pork, chicken and beef and a weakening economy in the United States that could hurt meat demand.
Fed prices slip
In slow, post-holiday trade the Canfax weekly steer average was $82.23 per hundredweight, down $1.75 from the week before mostly due to quality discounts. Heifers averaged $84.19, up 25 cents.
Sale volume of about 12,000 head was steady to the previous week. Fed exports saw 18,702 heading south for the week ending Dec. 22, a 10 percent increase from the week before.
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Due to warm weather and increased performance, more fed cattle are expected to be offered for sale in January. Packer interest was expected to increase this week. Expect prices steady to $1 higher for the first half of January followed by lower trending prices as more cattle find their way onto the show list.
Beef prices climb
U.S. beef cutouts were slightly higher on small box volumes due to the holiday shortened work week. The Choice cutout rose 55 cents to $148.38 US while Select was up $1.32 to $137.77. Cut-out values were expected to increase significantly due to the smaller kills the past two weeks but that has not materialized, Canfax said.
Packers will try to force the cutout higher to try to keep up with higher U.S. live cattle costs. U.S. cattle markets have been affected by winter storms in the plains and Midwest that have slowed cattle growth.
The Calgary wholesale market for delivery this week was $2 higher at $143-$144 Cdn.
Little feeder trade
Few if any feeder sales occurred over the holiday season with the last reported sales Dec. 21, said Canfax.
The final week of 2007 saw a volume of 6,582 head reported, which pushed the year to date volume to slightly more than two million head, down one percent from the total for 2006.
Feeder exports to the U.S. for the week ending Dec. 22 totalled 15,998 head, down 38 percent from the previous week. This brings the total feeders exported to 514,565 head, 79 percent higher than last year.
Light trade in slaughter cows and butcher bulls saw prices steady at preholiday levels.
U.S. buyer interest in feeders should remain relatively keen, but exports alone may not be enough to prevent the normal trend toward lower prices in January.
The relatively high Canadian dollar combined with high feed grain prices will continue to pressure feeder prices. Expect lower prices for the next two weeks, which could result in fewer feeder cattle going to auction, said Canfax.
Tightening supplies may have little effect on prices if domestic buyer interest is low.
Slaughter cows and butcher bulls should remain at pre-Christmas levels and trade steady until mid-January.
Hog prices fall
The supply of market-ready hogs in the U.S. outstripped demand and prices fell.
Profitable pork plant margins kept the slaughter pace high.
Iowa-southern Minnesota cash hogs traded at $36 US per cwt. Jan. 3, down from $38 Dec. 28.
The U.S. composite pork carcass cut-out value closed at $56.15 Jan. 3, down from $58.53 Dec. 28.
U.S. slaughter for the week ending Dec. 22 was estimated at 2.01 million, up 14 percent over the Christmas week and 8.9 percent more than the same week the year before.
Bison report
The Canadian Bison Association did not have a price report for the first week of January.
Lambs steady
Ontario Stockyards reported 668 sheep and lambs and nine goats traded at the Jan. 3 sale. Prices were mostly steady.
