Beef Watch: Strong demand keeps beef, cattle prices firm

Prepared by the staff of Canfax and Canfax Research Services, divisions of the Canadian Cattlemen’s Association

 

By Canfax

via Canadian Cattlemen - May 13, 2019

 

The Canadian cattle herd contracted in 2018, but feeder imports supported domestic beef production. Strong demand, especially from the global market, kept beef and cattle prices firm despite increased production. Prices have been holding at levels steady to slightly stronger than last year in the first quarter of 2019, but larger on-feed inventories and high feed prices add some caution to the market going forward.

 

Uncertainties around Chinese pork supply and demand may cause volatile prices throughout the year, as the North American market responds with both larger pork exports and potentially more volumes of alternative proteins. Although much of that is unknown at the moment, the futures market is already responding.

 

Cattle inventories

Canadian herd contracted in 2018

 

The Statistics Canada January 1 inventory report showed total cattle and calves down 1.1 per cent or 125,000 head at 11.45 million head. This is the lowest since 1991. Calves (<1 year old) were down 47,800 head, steers (greater than one year old) down 41,000 head and beef cows down 38,800 head or one per cent to 3.66 million head, again the lowest since 1991.

 

Beef cows were up 1.8 per cent in B.C. and 1.3 per cent in Saskatchewan. All other provinces reported a drop in beef cows. Beef cows were down 6.6 per cent in Manitoba (completely removing the increase reported last year), followed by 2.9 per cent in Quebec, 1.4 per cent in Alberta, 0.7 per cent in the Atlantic provinces and 0.5 per cent in Ontario. Over the last decade Eastern Canada has represented around 12 per cent of total beef cow inventories. Beef replacement heifers were also down 1.4 per cent to 553,800 head, with heifers down 2.6 per cent in the East and 1.2 per cent in the West.

 

The calf crop was down 1.3 per cent, steers were down 3.4 per cent and slaughter heifers were up 1.2 per cent. The smaller number of feeder cattle combined with the larger numbers currently in feedlots resulted in the number of beef feeders outside of feedlots being down 1.6 per cent at 3.66 million head, the smallest on record (series started in 2000). While the calf crop has been declining, slaughter rates have been supported by reduced feeder cattle exports to the U.S. and over the last two years feeder imports. In addition, the proportion of fed cattle and cull cows processed in Canada has been increasing. What happens to inventories in 2019 is largely dependent on weather and winter feed production this summer. Improved moisture conditions are needed in several areas to reduce culling rates from the liquidation levels seen in 2018.

 

Looking forward to 2019, weather will continue to be a key factor in herd expansion, particularly in regions that were dry over the last two years. Alberta hay prices made a new record high at $142/ton, up 22 per cent from 2017 and the five-year average.

 

U.S. herd expansion slows but still growing ...

 

Prices holding

Cutout values ...

 

Fed cattle ...

 

Feeder cattle ...

 

Solid international demand ...

 

Replacement ratios ...

 

more, including tables 

https://www.canadiancattlemen.ca/2019/05/13/beef-watch-strong-demand-keep-beef-cattle-prices-firm/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beef Watch: Strong demand keeps beef, cattle prices firm

Prepared by the staff of Canfax and Canfax Research Services, divisions of the Canadian Cattlemen’s Association

 

By Canfax

via Canadian Cattlemen - May 13, 2019

 

The Canadian cattle herd contracted in 2018, but feeder imports supported domestic beef production. Strong demand, especially from the global market, kept beef and cattle prices firm despite increased production. Prices have been holding at levels steady to slightly stronger than last year in the first quarter of 2019, but larger on-feed inventories and high feed prices add some caution to the market going forward.

 

Uncertainties around Chinese pork supply and demand may cause volatile prices throughout the year, as the North American market responds with both larger pork exports and potentially more volumes of alternative proteins. Although much of that is unknown at the moment, the futures market is already responding.

 

Cattle inventories

Canadian herd contracted in 2018

 

The Statistics Canada January 1 inventory report showed total cattle and calves down 1.1 per cent or 125,000 head at 11.45 million head. This is the lowest since 1991. Calves (<1 year old) were down 47,800 head, steers (greater than one year old) down 41,000 head and beef cows down 38,800 head or one per cent to 3.66 million head, again the lowest since 1991.

 

Beef cows were up 1.8 per cent in B.C. and 1.3 per cent in Saskatchewan. All other provinces reported a drop in beef cows. Beef cows were down 6.6 per cent in Manitoba (completely removing the increase reported last year), followed by 2.9 per cent in Quebec, 1.4 per cent in Alberta, 0.7 per cent in the Atlantic provinces and 0.5 per cent in Ontario. Over the last decade Eastern Canada has represented around 12 per cent of total beef cow inventories. Beef replacement heifers were also down 1.4 per cent to 553,800 head, with heifers down 2.6 per cent in the East and 1.2 per cent in the West.

 

The calf crop was down 1.3 per cent, steers were down 3.4 per cent and slaughter heifers were up 1.2 per cent. The smaller number of feeder cattle combined with the larger numbers currently in feedlots resulted in the number of beef feeders outside of feedlots being down 1.6 per cent at 3.66 million head, the smallest on record (series started in 2000). While the calf crop has been declining, slaughter rates have been supported by reduced feeder cattle exports to the U.S. and over the last two years feeder imports. In addition, the proportion of fed cattle and cull cows processed in Canada has been increasing. What happens to inventories in 2019 is largely dependent on weather and winter feed production this summer. Improved moisture conditions are needed in several areas to reduce culling rates from the liquidation levels seen in 2018.

 

Looking forward to 2019, weather will continue to be a key factor in herd expansion, particularly in regions that were dry over the last two years. Alberta hay prices made a new record high at $142/ton, up 22 per cent from 2017 and the five-year average.

 

U.S. herd expansion slows but still growing ...

 

Prices holding

Cutout values ...

 

Fed cattle ...

 

Feeder cattle ...

 

Solid international demand ...

 

Replacement ratios ...

 

more, including tables 

https://www.canadiancattlemen.ca/2019/05/13/beef-watch-strong-demand-keep-beef-cattle-prices-firm/

 

 

 

Prepared by the staff of Canfax and Canfax Research Services, divisions of the Canadian Cattlemen’s Association

 

By Canfax

via Canadian Cattlemen - May 13, 2019

 

The Canadian cattle herd contracted in 2018, but feeder imports supported domestic beef production. Strong demand, especially from the global market, kept beef and cattle prices firm despite increased production. Prices have been holding at levels steady to slightly stronger than last year in the first quarter of 2019, but larger on-feed inventories and high feed prices add some caution to the market going forward.

 

Uncertainties around Chinese pork supply and demand may cause volatile prices throughout the year, as the North American market responds with both larger pork exports and potentially more volumes of alternative proteins. Although much of that is unknown at the moment, the futures market is already responding.

 

Cattle inventories

Canadian herd contracted in 2018

 

The Statistics Canada January 1 inventory report showed total cattle and calves down 1.1 per cent or 125,000 head at 11.45 million head. This is the lowest since 1991. Calves (<1 year old) were down 47,800 head, steers (greater than one year old) down 41,000 head and beef cows down 38,800 head or one per cent to 3.66 million head, again the lowest since 1991.

 

Beef cows were up 1.8 per cent in B.C. and 1.3 per cent in Saskatchewan. All other provinces reported a drop in beef cows. Beef cows were down 6.6 per cent in Manitoba (completely removing the increase reported last year), followed by 2.9 per cent in Quebec, 1.4 per cent in Alberta, 0.7 per cent in the Atlantic provinces and 0.5 per cent in Ontario. Over the last decade Eastern Canada has represented around 12 per cent of total beef cow inventories. Beef replacement heifers were also down 1.4 per cent to 553,800 head, with heifers down 2.6 per cent in the East and 1.2 per cent in the West.

 

The calf crop was down 1.3 per cent, steers were down 3.4 per cent and slaughter heifers were up 1.2 per cent. The smaller number of feeder cattle combined with the larger numbers currently in feedlots resulted in the number of beef feeders outside of feedlots being down 1.6 per cent at 3.66 million head, the smallest on record (series started in 2000). While the calf crop has been declining, slaughter rates have been supported by reduced feeder cattle exports to the U.S. and over the last two years feeder imports. In addition, the proportion of fed cattle and cull cows processed in Canada has been increasing. What happens to inventories in 2019 is largely dependent on weather and winter feed production this summer. Improved moisture conditions are needed in several areas to reduce culling rates from the liquidation levels seen in 2018.

 

Looking forward to 2019, weather will continue to be a key factor in herd expansion, particularly in regions that were dry over the last two years. Alberta hay prices made a new record high at $142/ton, up 22 per cent from 2017 and the five-year average.

 

U.S. herd expansion slows but still growing ...

 

Prices holding

Cutout values ...

 

Fed cattle ...

 

Feeder cattle ...

 

Solid international demand ...

 

Replacement ratios ...

 

more, including tables 

https://www.canadiancattlemen.ca/2019/05/13/beef-watch-strong-demand-keep-beef-cattle-prices-firm/