Fed price declines
From highs in early June, fed cattle prices have dropped $8.50 per hundredweight. For most of this year, fed cattle prices followed a similar trend to last year. Last week, dressed sales were reported from $428-$429 per hundredweight delivered.
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There has been a significant basis shift over the past month. In early June, Alberta fed prices were at a premium to the Nebraska market. Now prices are at a $13+ per cwt. discount. With weaker basis levels, U.S. packers have become more active on the western Canadian fed market, with two U.S. plants buying cattle last week.
Canadian Prime and AAA grade was reported at 70 per cent, the lowest quality grade percent this year. Seasonally, this is expected because grading usually bottoms out in late June.
In Western Canada, cattle grading B4 have been on the rise. Cattle grading B4 are the highest since early December. The rise in dark cutters could be related to Ontario cattle being shipped into Alberta for slaughter.
Dressed sales in Iowa and Nebraska ranged from US$310-$315 per cwt. and live sales were at $198 per cwt., fully steady. Sales in Texas and Kansas were at $190 per cwt., steady as well.
Slaughter rates were lower due to the July 4 holiday, and one packer in Kansas was dealing with a roof collapse.
For the week ending June 15, U.S. beef cow slaughter was slightly more than 56,000 head, 18 per cent lower than last year. For the middle of June, this is the smallest beef cow slaughter since 2016, and dairy cow slaughter was the smallest since 2012.
U.S. beef exports for May were four per cent lower than last year. Beef exports to South Korea and China have been below last year for the first five months of this year.
The bright spot for U.S. exports is Mexico. Smaller markets such as Guatemala, Philippines and Indonesia also saw larger U.S. beef shipments compared to last year. In May, U.S. beef imports were up 10 per cent compared to last year.
Cow prices healthy
Alberta D2 cows have been above the C$180 per cwt. mark for 12 consecutive weeks and closed last week around $1.30 per cwt. stronger than the previous week, at $185 per cwt. Alberta D3 cows softened a slight 50 cents per cwt, ending last week at $171.50 per cwt. Butcher bulls were $1.40 per cwt. softer, closing just shy of $209 per cwt.
Alberta rail grade cows were fully steady with the previous week at $340-$350 per cwt. Rail grade cows were priced at 81 per cent of an Alberta fed steer, down from a high of 86 per cent during the first half of June, but significantly higher than the first half of January, when Alberta D2 cows were at priced at 68 per cent of a fed steer.
In Ontario, D2 cows closed last week barely steady with the previous week, at $163.53 per cwt., while D3 cows were fully steady at $140.78 per cwt.
Alberta cull cow prices over the first half of 2024 are 27-30 per cent stronger than last year, while butcher bull prices are 23 per cent stronger. Ontario cull cows haven’t seen the same strengthening but are still 21-24 per cent stronger than last year.
Auctions in doldrums
Alberta auction volumes continue to run small, following seasonal trends. Steers from 500-600 pounds and more than 900 lb. traded $1.63-$3 per cwt. stronger, while 700-900 lb. steers traded $4.25-$6.03 per cwt. weaker. Heifers traded steady to $5.54 per cwt. stronger across all weight classes.
For June, the Alberta 500-600 lb. steer/heifer spread was $59.93 per cwt., steady with May. The Alberta 800-900 lb. steer/heifer spread narrowed to $20.37 per cwt. in June from $37.08 per cwt. in May.
Over the past month, heavyweight heifers traded steady to stronger, while heavyweight steers were steady to softer. This is the smallest spread for 2024 and the smallest since May 2022.
For the week ending June 22, feeder cattle exports to the U.S. were 3,068 head, down nine per cent from last year. This is the first time in five weeks that exports have run below last year. Year-to-date exports to the U.S. are 83,443 head, up nine per cent from last year.
Cutouts get traction
In U.S. beef trade, Choice cutouts have found significant traction since late May, while Select appears unsteady, although both are bucking seasonal trends. Choice cut-out values averaged near US $330 per cwt. over the last week, while Select cutouts averaged near $305 per cwt.
This cattle market information is selected from the weekly report from Canfax, a division of the Canadian Cattle Association. More market information, analysis and statistics are available by becoming a Canfax subscriber by calling 403-275-5110 or at www.canfax.ca.
