Fed prices strengthen
Fed cattle prices have been on the upswing for the past four weeks, rallying nearly $10 per hundredweight. Even with the recent strength, fed prices are still $12 per cwt. lower than last year. Fed steers averaged $134.04 per cwt. last week, up 60 cents, and fed heifers averaged $133.17 per cwt., up 19 cents from the previous week.
Western Canadian fed prices have been disappointing compared to last year, whereas Ontario fed prices, Canadian butcher cow and bull prices and feeder cattle prices are for the most part trading steady to higher than last year.
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The week of July 13 was the second consecutive week that no cattle were accepted on the set-aside program. As a result, feedlots continue to shuffle cattle along. Feedlot margins remain negative. In turn, cattle feeders have been fighting the market by adding additional weight to their cattle.
There have been reports of cattle staying on feed for an additional 30 days. Despite the extra days, weights are manageable. A lot of steer calves that are being shipped to slaughter are weighing 1,400 to 1,500 pounds.
Western Canadian steer carcass weights for the week ending July 18 averaged 882 lb., three lb. larger than last year and nine lb. larger than the five-year average. Last week was the first time since April that one packer started accepting grid cattle, and this took some cattle off the cash market.
Dressed sales ranged from $223-$228 per cwt. delivered. Inventory wise, packers are positioned quite differently with cattle. One packer was buying cattle for one-week delivery while the other was scheduling cattle for the second half of August delivery.
Western Canadian fed slaughter for the week ending July 18 totalled 46,311 head, five percent lower than last year. This is the first time since early June that fed slaughter has been below last year. Over the past six weeks, 23,850 more fed cattle have been slaughtered versus last year.
In Ontario, dressed sales were reported in the low to mid $240s per cwt. delivered. Eastern Canadian fed slaughter was five percent lower than last year while eastern Canadian cow slaughter was nine percent larger.
Cattle feeders are facing an uphill battle because prices historically ease from July to August. In the near term, at least one packer has halted Saturday shifts. It is hoped Saturday shifts will return in August.
In the United States, trade was scattered last week. Dressed sales in the north ranged from US$157-$160 per cwt., fully steady with the previous week. Lives sales in the south were mostly $96 per cwt., steady to $1 per cwt. higher, while live sales in Nebraska and Iowa traded from $98-$100 per cwt.
There were reports that cattle from Kansas were being shipped north to Nebraska for slaughter.
Cow prices ease
Non-fed prices traded unevenly last week with slaughter cow prices easing C$1 per cwt. lower and butcher bulls modestly higher. D2 cows averaged $88.28 per cwt. and D3s averaged $77. Butcher bulls averaged $120.35 per cwt.
Dressed cow bids firmed to around $165-$170 per cwt. delivered last week on generally light auction offerings. Western Canadian non-fed slaughter for the week ending July 18 was down 18 percent from the previous week to 4,469 head and year to date was down 25 percent to 180,201 head.
For the same week, U.S. utility cows traded steady with Canadian D1 cows at around C$88 per cwt. Good demand for grind should be price supportive as retailers restock through peak grilling season.
Feeders strengthen
The Alberta feeder price tone strengthened last week on seasonally modest offerings. Calves less than 500 lb. saw insufficient trade volumes to establish a price trend, but middleweight calves saw prices steady to stronger than the previous week.
Feeders over 700 lb. generally rallied $2-$4 per cwt. higher than the previous week. Alberta 800-900 lb. feeder steers traded at a $4 per cwt. premium to Ontario last week and 900+ steers were almost $10 per cwt. stronger.
Weekly auction volumes were one percent larger than the previous week and 18 percent larger than the same week last year. Year-to-date auction volumes were 13 percent below year ago at 535,825 head.
The U.S. Department of Agriculture reports that Canadian feeder exports for the week ending July 11 were modestly larger than the previous week at 913 head but are 72 percent lower than the same week last year. Total year to date feeder exports are down 51 percent to 73,038 head.
Seasonally light auction volumes are anticipated this week, and calf prices are expected to trend steady on limited supplies. Good moisture conditions will encourage grazers to leave yearlings on grass longer this summer, and offerings through the end of August are anticipated to be light.
Feedlot demand should improve because recent aggressive fed harvests have freed up pen space. U.S. drought conditions are intensifying from the southern Plains over to the West Coast and are expected to force early weaning and flush calves to auction. U.S. stocker imports to Canada could ramp up if the drought south of the border intensifies.
U.S. cut-out prices mixed
In U.S. beef trade, Choice firmed almost US$1.50 per cwt. higher, averaging $202.26, while Select trended barely steady, averaging $190.79. Total U.S. slaughter was modestly lower than the previous week at 646,000 head. Steer carcass weights for the week ending July 11 were six lb. heavier than the previous week at 902 lb. and were 37 lb. larger than a year ago.
This cattle market information is selected from the weekly report from Canfax, a division of the Canadian Cattlemen’s Association. More market information, analysis and statistics are available by becoming a Canfax subscriber by calling 403-275-5110 or at www.canfax.ca.
