It was another tough week for the cattle feeder. Leverage has shifted out of feedlots’ hands toward the packing segment. In some cases, feedlots were looking to book hook space. Others were negotiating for a flat price with no heavy weight carcass discounts. Lift time continued to stretch out. Weighted average steer and heifer prices ended last week $11.00–$12.00/cwt lower than the previous week, revisiting their annual lows. Furthermore, prices were below a year ago for the first time this year. Dressed sales were ranging from $495.00–$502.00/cwt delivered, $16.00–$23.00/cwt lower than the previous week.
Most of the cattle on offer were heavier weight feeders and there was a good mix of background cattle and grass yearlings. Calf volumes were still light; most of the calves on offer were cow-calf pairs being split at auction. Western Canadian feedlot demand for yearlings has been strong, while Eastern Canadian buyers have been active on the forward delivery calf market. Over the past month, there have been a few bred heifers sold for forward delivery. Bred heifer prices were down roughly $300–$500/head compared to sales seen earlier this summer.
Alberta D2 and D3 cows continued to trade seasonally lower. For the month of August, D2 cows averaged $241/cwt, $10/cwt lower than July. Historically, prices are expected to continue to soften into the fourth quarter, with a modest rally heading into December. For the week ending August 22nd, Western Canadian cow slaughter was 5,212 head, up 32 per cent from last year and 2 per cent higher than the five-year average. Last week was the first time in 17 weeks that it has run above the five-year average.
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