Fed cattle prices rose 12 per cent from January to average $108.95 by mid-March on tight supplies of market-ready cattle, a strong futures market and a rally in Choice cutout values. Fed cattle prices at the current levels have not been seen since 2001-03 when the Canadian dollar was trading at 62 to 67 cents U.S. In the week ending March 18 they dipped to $107.88 with the uncertainty created by the earthquake and tsunami in Japan. At the same time U.S. fed steers moved in the all-time high range, with cash cattle trading at $117 per cwt. The fed basis slipped from a premium to -6.17 under the U.S. in the second week of March.
Steer slaughter to March 5 was down 12 per cent while heifer slaughter was running even with last year, another indicator of the lack of heifer retention from last year’s calf crop. As cattle were pulled ahead steer carcass weights dropped 15 pounds from the start of January and 18 pounds year-to-year. At the same time fed cattle exports to the end of February were down 29 per cent from 2010 at 77,700 head. Cattle on feed in Alberta and Saskatchewan at March 1 were down five per cent at 948,782 head, and February placements were 21 per cent smaller than last year. Marketings through February were down 12 per cent reflecting the small placements last summer and early fall.
Excellent demand for grass calves coupled with a smaller calf crop continued to support feeder prices. To mid-March, 550-steers climbed to $158.20, up $24.53 from the start of the year and $36.20 over 2010 while 850-steers traded steady between $119 and 122.85 for the previous six weeks. Feeder basis levels remain tight in 2011. The February 850 basis averaged -5.50 per cwt while the comparable pre-BSE basis was closer to -11.00. The current feeder basis is -6.30 compared to -9 in the same week last year and -18.20 two years ago. Feeder cattle exports were down 33 per cent at 15,270 head in the first two months of the year.
Calving is in full swing across much of the Prairies now, limiting the number of slaughter cows available. The Canadian beef herd is smaller, coupled with the smaller seasonal availability and the continued demand for grinding and trim beef has driven cow prices to an average $73.29 and a top of $82 on good-conditioned cows. Canadian cow slaughter to March 5 was 95,920 head, down 16 per cent. Bull prices continued to climb on good demand in a range of $65.00-$92 per cwt, averaging $80.83. Given the salvage value of older herd bulls many producers have opted to bring in younger stock and new genetics. Bull slaughter to date is up 31 per cent at 3,362 head. Cull exports were down 34 per cent at 34,398 to the end of February.