In this file:
∑ Fed-cattle prices moving higher
∑ Contracting supplies improve cattle outlook
Fed-cattle prices moving higher
The Markets with Deb McMillin, from the September 2020 issue of Canadian Cattlemen
By Debbie McMillin, Contributor, Canadian Cattlemen
September 9, 2020
Impressive summer slaughter rates coupled with strong wholesale demand have moved fed prices higher after weeks of a steady trading range. The fed steer price in Alberta in mid-August was $136.92/ cwt, which was a jump of $2.81/cwt from the previous week. Cash-to-cash basis is narrow at -$1.47/cwt, which compares to -$3.39/cwt a year ago and the five-year average of -$6.18/cwt for the same week. Although front-end supply remains larger given the backlog created earlier in the spring, many weekly kill totals through- out the summer have outpaced year-ago slaughter rates.
Carcass weights coming in lower than last year is also positive. The most recent weekly steer carcass weight was 904 lbs., which was 10 pounds lighter than the previous week and three pounds lighter than the same week in 2019.
Exports of live fed cattle for slaughter, including cows, are up eight per cent from a year ago, totalling 297,284 head. While recent weeks have seen increases in domestic slaughter numbers, the total fed steer slaughter to date for 2020 is still down four per cent at 934,361 head and fed heifer numbers are down five per cent at 537,682 head.
Alberta and Saskatchewan cattle-on- feed inventories continue to be larger than year-ago levels. The August 1 cattle-on- feed total was 831,854 head, which is four per cent larger than 2019 but also the largest August 1 on-feed in 19 years.
Debís outlook for fed cattle ...
Debís outlook for feeder cattle ...
Non-fed cattle ...
Debís outlook for non-feeder cattle ...
Contracting supplies improve cattle outlook
Aside from seasonal ups and downs, the trend is upward
By Jerry Klassen, Columnist, Grainews
September 10, 2020
During the last week of July, Alberta packers were buying fed cattle on a live basis in the range of $134 to $135 f.o.b the feedlot. The weekly slaughter pace on both sides of the border has been running similar to year-ago levels over the past few weeks.
The backlog of market-ready supplies is slowly shrinking as we move into the fall. Beef exports have been coming in higher than expected, draining the surplus production away from the domestic market. Despite the rising COVID cases in the U.S., domestic North American beef demand has also improved, causing wholesale prices to stabilize. The feeder market remains firm heading into the main fall run.
The USDA forecasted a year-over-year decline in the 2020 calf crop in the July semi-annual cattle inventory report. This will be the second year of herd contraction south of the border. As of early August, mixed steers averaging 850 pounds coming off pasture were quoted in the range of $185 to $190. Prices for yearlings are near 52-week highs. Feed grain prices are expected to soften through the harvest period and feedlots will be contending with lower cost-per-pound gain. The cattle markets have shrugged off economic uncertainty for the time being. Despite rising COVID cases in the U.S., unemployment levels are expected to decrease over the next six months, which should enhance consumer spending.
At the end of July, U.S. feedlots were holding approximately one million head of cattle that should have been slaughtered earlier in spring and summer. Most of this backlog will be alleviated over the next three months...
Market dealing with backlog ...†
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