
by Deb McMillin
As the fall calf run got underway price pressure was definitely evident. Concerns about COOL, high feed costs in comparison to other years and economic uncertainty seemed some of factors leading feeder prices in the wrong direction.
From the end of August to Mid- October the Western Canadian 550 lb feeder steer price went from 106.00/cwt to 97.65/cwt. In the past few weeks the auction market volumes have started to pick up to more seasonally normal levels. In addition the Canadian dollar has been under pressure in recent weeks and feed grain prices have eased from previous levels.
All of this has been supportive to the feeder price increasing again. The average 550 lb feeder steer price had climbed to 105.51/cwt at the end of October. While fundamentally speaking there are many factors that would suggest a continuation of steady or stronger prices in the weeks to come, there are also many other factors at play this year. Varying regulations churning around about the implementation of COOL in the US will play a major role in both feeder cattle exports as well as the mentality of the placements in the domestic market. In addition changing government leaders in the US may have an impact as the new president elect has spoke about re-evaluating free trade agreements. In addition continued economic trouble particularly south of the border may be a limiting factor on cattle prices as we wait to see how much consumer spending cutbacks affect overall beef demand.
Fed Slaughter Update
Front-end supply of market ready cattle in Canada has been tighter since the start of the year as indicated by inventories and on feed totals. This has shown up in the fed export numbers but also in the domestic slaughter statistics. The number of fed steers in Canada that have been slaughtered is down 1% when looking at the combined weeks of kill up to and including the week ending October 25th. The total number of steers slaughtered in that time frame is 1,237,264 head compared to 1,249,946 head in 2007.
Broken down more regionally Alberta’s’ total was 895,343 head while Saskatchewan, Manitoba and British Columbia combined totaled 43,261 head. Eastern Canada consisted of Ontario with the bulk of the slaughter at 288,886 head, Quebec and the Atlantic provinces together accounted for 9,774 head. Heifer slaughter is down 3% to a total of 810,804 head to the end of October. Last year the same weeks saw domestic heifer slaughter at 833,434 head. Again the bulk of the slaughter is in the west with a total of 651,465 head, 631,168 in Alberta and 20,297 head in Saskatchewan, Manitoba and British Columbia combined. There were 153,722 head of fed heifers killed in Ontario and 5,617 head in Quebec and the Atlantic provinces.
In general higher cost of gain and grain prices result in smaller carcass weights as feedlots managers are quick to move cattle off the feed bill. It would appear this has not been the case with the higher feed costs in 2008. To date the steer carcass weight is 845 lbs., the same weeks last year saw an average carcass weight on fed steers at 839 lbs and in 2006 the average was 840 lbs.
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