Fed cattle prices see slight increase, beef demand strong

The Markets with Deb McMillin, from the September 2021 issue of Canadian Cattlemen

 

By Debbie McMillin, Contributor, Canadian Cattlemen

September 3, 2021

 

Fed cattle

 

After three weeks of hovering around $150/cwt, the average Alberta fed cattle price increased slightly by mid-August to $151.43/cwt. That is $17.32/cwt higher than one year ago when we were still working through the COVID backlog, and over $9/cwt higher than the five-year average. While sale prices are above last year, the high cost of gain left very little room for profit for feedlots through the second quarter. Although this time of year generally marks the lows in the fed cattle market, the U.S. trend has been stronger over the past few weeks. As a result, the strong basis position that Canada held through much of 2021 has weakened, with the spot basis at -$3.82/cwt in mid-August.

 

Beef demand remains strong. Export demand in both Canada and the U.S. is outpacing expectations while domestic food-service demands are picking up as COVID restrictions have lifted in many areas through the summer.

 

The August cattle-on-feed report also revealed the drought impact, as cattle-on-feed total numbers for August 1 are the largest since the report started over 20 years ago. While slaughter numbers held to seasonal averages, more feeder calves were placed on feed due to dry pasture conditions, increasing the on-feed totals earlier than normal. The August 1, 2021 on-feed total was up 11 per cent from a year ago at 920,982 head. Placements through July were up 98 per cent to total 140,309 head.

 

Fed slaughter is larger than a year ago. Steers kill is 10 per cent ahead of last year at 1,031,652 head while heifer slaughter is 620,492 head, up 15 per cent from a year ago. Live fed cattle exports including cows are still under a year ago, down 21 per cent at 235,358 head, cumulative, to the end of July.

 

Debís outlook for fed cattle ...

 

Feeder cattle ...

 

Debís outlook for feeder cattle ...

 

Non-fed cattle ...

 

Debís outlook for non-fed cattle ...

 

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https://www.canadiancattlemen.ca/markets/fed-cattle-prices-see-slight-increase-beef-demand-strong/