Good beef demand in 2019 supports fed cattle prices
The Markets with Deb McMillin, from the January 2020 issue of Canadian Cattlemen
By Debbie McMillin, Contributor, Canadian Cattlemen
January 6, 2020
McMillin is a market analyst who ranches at Hanna, Alta.
Demand has been key in 2019. Good beef demand in both Canada and the U.S. has supported fed cattle prices throughout the year. Fed prices rallied again in November and early December in Western Canada.
Support coming from tighter front-end supply and growing holiday demand led to a 13 per cent increase in the cash fed price in Western Canada since the low in September. At the start of December, the average fed price in Western Canada was $154.14/cwt, compared to $151.06/cwt last year.
At an average price of $154.14/cwt, the early December fed market was $7.13/cwt higher than two weeks earlier and nearly $11.50/cwt higher than the average price one month earlier. The cash-to-cash fed basis narrowed to -$7.44/cwt.
Weekly fed kill at the end of November was the highest weekly slaughter for November since 2005. Total slaughter was 1,598,708 head of steers and 853,090 head of heifers, which was up seven per cent and four per cent, respectively. Up to the third week of November, fed cattle exports (including cows to the U.S.) were up 22 per cent, at 426,463 head.
Debís outlook for fed cattle: Feeder placements through the spring were light, which should mean front-end supplies will remain tight at the start of the new year, before the yearling run starts. Beef demand is good and the export market and reopened border with China are supportive. The Tyson plant that was closed earlier this year due to a fire has also reopened, which will help with timely slaughter and movement in the U.S. Buyers looking to fill holiday orders are aggressively competing for tightening supplies, which is always good for the market. Prices in the near term should be well supported and are expected to have strengthened through December. The fed market should continue to be well supported as we move into 2020.
Feeder Cattle ...
Debís outlook for feeder cattle ...††
Non-Fed Cattle ...
Debís outlook for non-fed cattle ...