Grass feeder prices strong, breeding heifer replacements smaller: Canfax cattle market update

The 2024 summer grazing season has arrived, and with it a renewed optimism. Feeder prices are historically high, with weather playing a big role. Snow accumulation this past winter raised hopes of increasing sub-soil moisture levels for 2024. However, there have been multiple reports
of snow drought conditions, and dugouts that are only partially filled.

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The Canadian cattle herd as of January 1, 2024, is down 2.1 per cent from last year to 11.1 million head. The beef cow herd is down 2.4 per cent to 3.46 million head, with beef breeding heifers down 5.6 per cent to 520,000 head. Spotty moisture conditions across a wide swath of the Prairies last summer and fall discouraged herd expansion. As of March 31, the Canadian Drought Monitor shows most of the Prairies to be experiencing moderate to severe drought conditions, with a small pocket of Southeastern Alberta and Western Saskatchewan in extreme drought. Heifer retention in the fall of 2024 will be weather dependent, as supply and demand fundamentals remain largely supportive.

Feeder steers destined for summer grass have seen considerable support so far this spring. Alberta 550 lb feeder steers averaged $412/cwt in the first quarter of 2024, 32 per cent higher than last year and 69 per cent higher than the five-year average for the first quarter. Since mid-March, Alberta 550 lb steers have moved mostly sideways, ranging $420-431/cwt.

Alberta 650 lb steers have followed mostly in lockstep with their lighter-weight counterparts, climbing 17 per cent over the first nine weeks of 2024, then trending sideways through March and into April, straddling $400/cwt.

Alberta 850 lb feeders averaged $311/cwt in the first quarter, 26 per cent higher than last year and 60 per cent higher than the five-year average for the first quarter. Averaging $321/cwt in March, Alberta 850 lb feeders were only 2 per cent shy of their all-time highs set in September 2023. The recent decline in the feeder cattle futures threw some cold water on what was shaping up to be a strong spring rally. Seasonality suggests 850 lb feeder prices will remain supported moving through the second and third quarters.

The non-fed market shows no signs of slowing down. Alberta D2 cows averaged $144/cwt in the first quarter of 2024, 30 per cent higher than last year and 61 per cent higher than the five-year average for the first quarter. Cow slaughter is down 5 per cent YTD in the West, down 11 per cent in the East and down 13 per cent in the U.S. Lean 85 per cent cow trim, the main ingredient in ground beef and burgers averaged US$308/cwt in March and pushed above $325/cwt in the first half of April. Increased traffic to fast food restaurants this summer is anticipated to be supportive to lean trim prices.

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This article was first published in Volume 4 Issue 2 of ABP Magazine (June 2024). Watch for more digital content from the magazine on ABP Daily.