Canfax Weekly Article | Report for the week of August 21, 2023

The Alberta dressed fed trade range was comparable with the previous week from $388-393/cwt delivered. More cattle were procured at $388/cwt delivered, and the weighted average price was pressured almost $2/cwt lower. Weighted average steer prices have now slipped lower for eight straight weeks and are the lowest seen since May 12. YTD Western fed slaughter was down 7% compared with the same week last year to 1,280,896 head. Fed cattle/cow exports to the U.S. for the week of August 5 were 3% larger than the previous week at 7,126 head and were 4% larger than the same week last year. The Ontario cash market was not fully established last week, but the market tone was generally steady to $1/cwt higher, with thin reported trade from $389-390/cwt delivered.

On the feeder front, the yearling run is underway, and auction volumes totaled more than 47,000 head. Backgrounded cattle are trading at roughly $8-12/cwt discount compared to cattle coming off grass. Barley delivered into Southern Alberta is being booked from $360-370/tonne. AB/SK 6-weight steers for October delivery traded from $355-370/cwt, with a weighted average price of $364.19/cwt based at 634 lb. On average, forward delivery sales for October delivery are looking roughly $2/cwt lower compared to sales during the first half of August. 

With dry conditions and higher feed prices, cow culling pressure is evident. Demand for bred cows remains limited and most, if not all, exposed cows are going to slaughter. In addition, many cow-calf pairs are also being split at auction, adding a few more cows to the slaughter mix as well. After trending lower over the past four weeks, cow prices were reported $3/cwt higher this week, while butcher bull prices strengthened $1.75/cwt. Non-fed prices are currently trading $5-7/cwt, shy of their highs set back in June. Over the past month, Western Canadian cow slaughter volumes have been steady at 6,000 head per week. Over that timeframe, cow slaughter volumes are 4% larger than last year and 9% larger than the five-year average.

Bull:

• Cutout values should maintain momentum through the remainder of August.
• July retail beef prices in the U.S. were record high.
• U.S. August Cattle on Feed inventories are 2% lower than a year ago.

Bear:

• Fed prices historically bottom in September.
• Cow slaughter volumes are 4% larger than year ago.
• Packers are bought out to the end of September.