Canfax Weekly Article | Report for the week of March 26, 2024

Alberta fed price last week had light trade; steers were down $1/cwt and heifers up $4.75/cwt. Cash sales to the U.S. were in the upper $230’s/cwt FOD the feedlot, steady with last week and premium over local deals.

The cash basis at -$25/cwt is the weakest since last February, and continues to encourage exports south. The week ending March 9th, Canadian cattle and cow exports to the U.S. totaled 13,465 head, up 34 per cent from last year. Canadian fed slaughter at 50,975 head, remain steady week over week and down 1.3 per cent from last year.

Last week, the feeder market remained near record highs. Heavier weight feeders have seen an increase at $30/cwt since the beginning of the year. While Eastern Canadian buyers typically focus on heavier steers, this year they appear to be more interested in steers weighing between 500 and 700 pounds. Price spread between 550 pound steer and heifer calves has significantly narrowed to $40/cwt since the start of the year.

Alberta feeder prices are currently at an $18/cwt premium compared to the U.S. market, contributing to historically low Canadian feeder exports. In January, Canada was a net importer of U.S. feeders. With the increased bunk capacity in Western Canada, it is anticipated that this year Canada will once again be a net importer on U.S. feeders.

Last week, Alberta butcher cows reached new records with average prices in the mid $160s/cwt. Both western Canadian packers and feeder cow buyers were active in the market. The volume of cow slaughter in Western Canada has remained steady, averaging approximately 10,000 head per week, similar to last year.

As of January 1st, cow inventories in Alberta and Saskatchewan were down of 0.1 and 4.2 per cent respectively compared to last year. This is the lowest since the early 1990s. With expectations of persistent tight supplies, there is great anticipation for further upward movement in cow prices.

Bull

• Tighter cow supplies will support price moving forward
• Western Canadian carcass weights are getting more current
• U.S. fed prices hit a new record high

Bear

• Alberta cash-to-futures basis remains week
• Fed market has been sluggish with prices steady for the past four weeks
• Western Canada’s bunk capacity will support net imports of U.S. feeder cattle