The Western Producer (Canada)
February 6, 2020
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.
Fed prices lower
After trading in the low $160s per hundredweight for the past five weeks, fed prices took a step backward, closing $5-$6 per cwt. lower. Fed steers averaged $158.78 and fed heifers averaged $156.27.
There are price similarities between this year and last. In 2019, prices were flat for the first few weeks in January followed by a price pull-back in late January.
Strong prices over the past month have put feedlot inventories in good shape, and selling pressure was limited last week and sale volumes were light. A softer price tone was noted as the week progressed. On Jan. 28 sales started out at $270 per cwt. delivered, but by Jan. 29 prices were reported at $265 per cwt. delivered.
Two of the three western Canadian packers bought cattle last week but overall competition on the cash market was limited. Cattle that were bought are scheduled for the second half of February delivery. A basis shift was observed as Alberta fed prices went from a premium to the U.S market to a discount last week.
In Ontario, dressed sales were reported at $255 per cwt. delivered, fully steady with the previous week. Cattle were being scheduled for next week delivery. Year to date, the 2020 eastern Canadian steer slaughter is down five percent compared to last year and heifer slaughter is down four percent.
Based on the latest Canadian cut-out prices, the AAA/Choice spread is -$4.60 per cwt. and the AA/Select spread is -$11.06 per cwt. Processing margins have narrowed for western Canadian packers, and there has been talk of reduced hours.
Packers will be able to pull on February contract cattle this week while grid cattle volumes also sound ample.
In the U.S. fed cattle trade, dressed sales in the north ranged from US$194-$196 per cwt., which is $3-$4 per cwt. lower than the previous week. Live sales in the southern U.S. were marketed at $122 per cwt., which is $2 per cwt. softer. Weekly U.S. beef production was up seven percent compared to last year. Total U.S. beef cow inventory on Jan. 1 was down by 374,000 head compared to last year, and total dairy cow numbers were down 19,000 head.
Cows ample at auction ...
Feeders pressured lower ...
Meat trade ...