Canada’a feedlots continue to hold more cattle than last year or the 2013-2017 average, while the number of cattle placed on feed remains very close to both, says data from Canfax, a private market advisory service.
The data only includes feedlots located in the prime feeding provinces of Alberta and Saskatchewan and is published by Canfax to its members. The data then is assembled and published by the Livestock Marketing Information Center.
Feedlot populations in Canada are very seasonal because of the climate’s effect on cattle physiology. Even 2019 numbers, while larger than the five-year average, are running parallel to the average.
The data showed that Canada had 900,007 head of cattle on feed as of July 1, down from 967,282 a month earlier but up from 839,073 a year earlier and up from the previous five-year average of 767,140.
Placements in June totaled 78,065 head, down from 103,697 in May and down from 99,777 a year earlier but up from the previous five-year average of 64,553.
DEMAND SHIFT?
There is a greater demand among US consumers for choice- and prime-graded beef and away from select or no-roll. A similar demand shift may be happening among Canadian consumers.
Cattle generally must be fed a little longer to give them the time to reach their genetic potential for marbling, or intermuscular fat, that determines eating quality, or carcass grade.
If there is a shift in consumer demand similar to US consumers, it might account for some of the extra time Canadian cattle are spending on feed.
ADDED FEEDLOT CAPACITY?
The stability of the added numbers compared with the 2013-2017 average might indicate added feed yard capacity within the two provinces. Canfax has never revealed its sample size, and admitting it had added another feedlot to the statistical mix could reveal private industry data.
The gradual increase in numbers from the average could show growth in the total feeding capacity of the two provinces.
However, this can’t be the total story since placements remain in line with previous years.
DRY PASTURES?
Something that many in the US might not realize is that there are vast areas of western Canada that are very dry. In fact, wild fires earlier this year clouded the skies with so much smoke that it produced a haze into the northern US Plains.
The North American Drought Monitor shows British Columbia to be almost entirely short of its normal amount of moisture. Alberta and Saskatchewan also show large areas that range from abnormally dry to extreme drought.
Drought-ravaged pastures can send cattle to the feedlots early, which would extend their stay.
But if calves were being sent to feed earlier than normal, there should be a corresponding jump in placements.
It seems, then, that cattle likely are being fed longer to attain a higher percentage of better-grading carcasses.
CATTLE, BEEF RECAP
Cash cattle traded in the Plains Wednesday at $111 to $114.50 per cwt on a live basis, steady to down $0.50 from last week. Dressed-basis trading was reported at a steady $182 to $185.
The USDA choice cutout Wednesday was down $0.36 per cwt at $212.57, while select was off $0.82 at $188.34. The choice/select spread widened to $24.23 from $23.77 with 136 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Tuesday was $141.01 per cwt, down $0.08 from the previous day. This compares with Wednesday’s Aug contract settlement of $140.57, down $0.47.
Correction: Tuesday’s reprint of Nevil Speer’s article about the role of basis in hedging actually was published by Beef and not Drovers.