Beef Market Update: Markets struggle to get through "stubbornly heavy" carcasses

It’s spooky season, and Anne Wasko of the Gateway Livestock Exchange is ready with her witch’s hat (to be worn with the grandkids, of course).

As we approach Halloween, it’s no surprise for the west of the country to experience snow (after all, what would be Halloween in Canada without snowsuits under costumes), and Wasko’s neck of the woods — southwestern Saskatchewan — got some much needed moisture.

All that and more, in this week’s episode of the Beef Market Update.

Check out the full summary for what we learnt in the U.S. this week, what happened in Canada on fed cattle prices, where we are sitting on calf prices, and more, below:

SUMMARY:

• U.S. markets are still very solid and strong again this week, which is some great news coming out of the U.S. in the short term
• Texas and Kansas were up another $2 to $150
• In the Nebraska: region $151-$153 live and $238 to $240 dressed
• The choice cut out is $9 higher than a week ago — $16.50 higher than a month ago
• Mid-to-late October, the U.S. holiday season really kicks into gear
• Middle meats and specifically the rib are a key feature item through U.S. Thanksgiving, and the Christmas/New Year holiday season
• We should continue to see some solid peaks headed into November
• In fed cattle, Alberta markets still traded at $302 delivered
• The local Alberta fed market continues to be probably one of the most disappointing in terms of the relationship to the U.S. price
• Markets are really struggling to get out from these heavy carcasses
• Stubbornly heavy is the word Wasko would use — 972 pounds again last week on steer carcass weight, which is 21 pounds over last year and 38 pounds over the five-year average
• It always takes longer to clean up the supply than you want to think or believe
• It’s been a busy October for sure in the fall cattle run
• Using 550 weight steer calves in Alberta as a barometer, prices are 25 per cent higher than a year ago
• Auction market volumes are all running above the five-year average through October
• Looking at history, fall run peaks usually in late October (i.e., now) or the very beginning of November
• The October one number for cattle on feed was released last week for the U.S.
• The report out of the U.S. last week is the same trend kind of going on in the U.S. compared to what we’ve seen in Canadian data in terms of placement patterns
• Bottom line, more heifers are making their way on feed largely due to the drought in the U.S.
• Numbers coming out of the U.S. drought monitor yesterday — 60 per cent of the U.S., is in drought and 80 per cent is what they call abnormally dry conditions
• That hasn’t been seen for this time of the year since the drought monitor started 22 years ago
• Cattle on feed numbers are staying a bit more inflated than what we would have originally thought, with more heifers bumping those numbers

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