Fed cattle prices the past four weeks in Alberta have held mostly steady, the price average ranging from $86.43-86.93/cwt. The mid-February average steer price in Alberta was $86.93/cwt, which was more than $5.50/cwt higher than the same week in 2008. Western Canadian feedlots remain very current in marketings, giving sellers some bargaining position to hold the market steady while meat movement continues to be slower.
Fed basis in February remained wide, more than 15/cwt under the U. S. market. Looking at the year so far, the average spot basis since the start of 2009 is a shade less than 15/ cwt under the U. S. cash. The same weeks last year the average basis was –8.30/cwt. The difference between the two years in fed steer value on a 1,350-lb. steer would equate to approximately $85/head loss due to basis shift alone.
Fed steer slaughter in Canada through the first five full weeks of the year totalled 143,400 head, up 19 per cent from 2008 and heifer slaughter was up 15 per cent at 96,506. While volumes were up steer carcass weights are down significantly. In early February the weekly steer carcass weight was 828 lb. and 830 lb. year-to-date, which is 36 lb. below the average for the same weeks in 2008. In the U. S. the average steer carcass at the same time weighed 855 lb, well above the 829 lb. posted last year at this time.
A total of 61,230 head of fed cattle have been exported to date, down 42 per cent from last year, largely due to the uncertainty over COOL regulations, feed supplies and larger carcass weights in a U. S. fed cattle supply that seems sufficient to meet the current sluggish demand for beef.
The CanFax Alberta/Saskatchewan cattle on feed February 1 report totalled 950,679 head, up 6 per cent over 2008. The decline in feeder cattle exports was evident in the January placement figure which was also up, by 18 per cent on the year. Marketings were up as well, by 2 per cent, at 194,475 head, as domestic packers picked up their fed slaughter.
Feeder cattle prices picked up steam from the start of the year. Heavy cattle maintained their momentum with Alberta 850 lb. steers gaining $8/cwt to $97.20/cwt by mid February. That is $15 ahead of the same week in 2008. The 850-lb. feeder basis tightened from the near –30/cwt under seen early in the year, however it is still wide, averaging –22.14/cwt at press time. The demand in the grass cattle market started a little early this year, as eager buyers sought to tie up supplies. The 550 lb. feeder steer price in Alberta at mid-February was $114/ cwt, up $15/cwt from the start of the year and $19.50 from last year.
Auction market volumes through January were large with many feeders sold locally. Live feeder exports to the U. S. through the first five weeks of 2009 reached only 37,577 head, down 44 per cent compared to the same weeks of 2008.
Cull cattle volumes, demand and price remained strong to mid February. D1,2 cows in Western Canada at the time of writing averaged $43.61/ cwt, which showed an improvement to date in 2009 of nearly $3/cwt and was more than $8/cwt higher than the same week in 2008. Cow slaughter in Canada was down 3 per cent year-to-year, however exports at 19,400 head were running 26 per cent ahead of last year.
— Debbie McMillin
Debbie McMillin is a market analyst who ranches at Hanna, Alta.