Seasonal price declines are typical for this time of year, but the September slowdown in wholesale and fed cattle markets is drawing sharper attention amid a backdrop of volatile futures and supply uncertainty.
In this week’s episode of the Beef Market Update, Anne Wasko of Gateway Livestock Exchange notes that fed cattle prices have continued their downward trend. U.S. cash prices dropped again this week, with southern prices at US$237/cwt and northern prices as low as US$232/cwt—down as much as $6 from the previous week. "The choice cutout closed last night at (US$)372, that's 14 bucks lower than last week,” says Wasko. “The market usually loses anywhere from 5 to 10% from August highs... to the September or October low, so we're kind of right at that level.”
In Alberta, fed cattle markets have been notably quiet. Packers, facing losses due to lower cutout values, have scaled back kills and bidding activity, pushing draft market averages to around C$312/cwt delivered.
Adding to the market turbulence is a growing concern around supply disruptions. The latest case of screwworm closer to the U.S.-Mexico border triggered major futures market swings. Wasko notes that the December live cattle market moved over 800 points in four days, while November feeder cattle futures saw a $14/cwt swing. "It's volatility at extreme levels with a lot of... supply unknowns around us, especially around the whole screwworm discussion and issue," she says.
Despite weaker prices and supply jitters, Wasko points to signs of heifer retention as a potential signal of early herd rebuilding in Canada. “So far this year in Canada, our steer slaughter is up 2%, heifer slaughter is down 15% and our cow slaughter is down 7%, and the U.S. has a very similar trend,” she notes.
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Hey, well, let's get into the beef market update with Anne Wasko, the Gateway Livestock Exchange. And how we doing on this Friday?
I am good today, Shaun. How about you?
Pretty good. Well, it's the last Friday of September. Can you believe that?
I can't. I can't.
Brutal.
Yeah.
Where'd September go? So we are into the fall run. Let's get a bit of an update here. What's going on with cash prices?
Well, cash markets did their typical or have been doing their typical September seasonal slowdown. When you talk about wholesale prices and fat cattle prices and that's let's, let's update that. So that theme continued. You know, Lindsay and I talked about that even two weeks ago and that that theme has continued. So in the US this week in the south our fed cattle market was 237. That's two to three dollars lower than last week. And in the north 232. So you're seeing that north south switcher in terms of south premium now. But that north market was 4 to $6 lower. And draft in the north we were 365 down 5 bucks from last week. So that was, that was kind of how things finished. What led the, what led the pack was that cut out that wholesale price. Shaun, the choice cutout closed last night at 372. That's 14 bucks lower than last week. It's now lost 10% since the start of the month. That's a fairly that that's still within the range. But now it's a, you know, the market usually loses anywhere from 5 to 10% from August highs and cut out to the September or October low. So we're kind of right at that level. So we would be expecting that to catch if you will. And the select spread was 1850 back from that. So pretty typical choice select spread in the Alberta market. Really quiet, Shaun. I think, you know, with packers now because of that lower cutout, we've got packers back in the red. So they're losing money. They've cut back on kills, not showing near kind of appetite to own cattle. And that was really clear in Alberta this week in terms of really very limited bidding going on. And so when we're talking, there hasn't been any trade yet. I suspect there could be by the end of today. But just for a refresher, last week the, the dress market in Alberta was 520. The 525 delivered drafts. So that Canfax average came in at around 312 if somebody's wanting to keep track. Yeah, and the other little point that we'll see what kind of impact this has as we go forward. But the Canadian dollar just here in the last 24 hours has closed under 72 cents. And we haven't been there for a little bit. We've been really hovering closer to that 73 in a bit. So we'll watch that one going, going forward. So I haven't got the greatest, you know, fed cattle wholesale news to give you, but it's kind of seasonally typical, if I can say that.
Yeah, we're just not used to people saying prices went down, but we're just not used to that ant, I guess. So we're on a rocket ship here. What are we doing?
I guess that's it. That's it.
What kind of impact is the screw worm issue in Mexico having on some of the, like some of these feed yards that would be more reliant on Mexican feeder cattle? Like, what's happening? How is the market?
Yeah, well, let's, let's talk about. So last Friday, USDA had their September 1st cattle on feed report. So we' talk about that. But then let's also talk about what happened this week in terms of the volatility on the futures market. In terms of the news we got early this week of, of another case of screw much closer to the US border. But first of all, the report last Friday, we, we called it neutral because it was pretty much on track with what the trade was expecting. But those numbers were on feed September 1st down 1%. August placements down 10%. So now we're at the fifth month of consecutive smaller placements that those were the smallest placements since 2015. And August marketings were down 14%. Again, you can see the slowdown. Cattle are staying on feed longer. There's not aggressive marketing. The swap to buy feeder cattle to place them is poor. The numbers aren't there because of the lack of import. So there's certainly some signs showing up and have been showing up for the last few months in terms of the smaller placements. When you start talking about a million or a Million and quarter fewer feeder cattle coming from Mexico. But the news this week, you know, certainly with another case much closer to the US border, 70 miles south of the US border, set the markets on a flurry on when the news came out early this week. But then by the by late this week, yesterday and today, we're seeing markets back off again. Back to this news of wholesale prices down, cash market down. But long story short, talk about volatility in the futures market. The December live cattle market just in four days had an 800 over 800 point move up and down or $8, $100, however you wanted to say it. And November feeder cattle had over $14 move up and down. So it's volatility at extreme, extreme levels with a lot of this supply unknowns around us, especially around the whole screw worm discussion and issue.
Yeah. And it doesn't seem like, you know, early in the screw worm saga there was, you know, opening, closing, opening, closing. Right now it feels like the door shut, like we're, we're closed.
Yeah. This, this last case, I really think the markets took it that way, Shaun. I guess we'll see what, what USDA does, but certainly the markets took it that way in terms of, okay, this looks like it could be a long, longer term situation rather than just, you know, in another month or two, the border might reopen and those flow of feeder cattle could start moving north. So we don't know, Shaun. I guess that's the bottom line. But the market appears to have taken the stance. Okay, we're going to be short on supply for a bit, so you shall see.
Well, speaking of the supply, there's, there's always talk in the US and in Canada about when will we start to rebuild that herd. And there was talk this week, kind of a start and stop in regards to Secretary Rollins talking about potentially incentivizing ranchers to retain heifers. From a Canadian perspective, what, what are the numbers kind of showing? Is there indications potentially that more females are retained?
Yeah, I think there is. And I guess I would just say to start off those comments would be, you know, you give, give the operators profitability, the cow calf operators profitability and some moisture and they will do their job. I guess that would be my message in terms of you want to get things started. That's what needs to happen. Well. Prof. Happening in spades. Some areas have had better moisture than others. So that's why I think it might be kind of a regional change in terms of heifer retention. But we are seeing some numbers. I just wanted to go through these. So so far this year in Canada, our steer slaughter is up 2%, heifer slaughter is down 15% and our cow slaughter is down 7%. And the US very similar trend. The US cow slaughter could be one of the smallest in history, potentially here in 2025. Canfax, when you look at their on feed report that they put out every month, year to date, we've got heifer placements in terms of western Canadian feedlots down 8%, whereas the steer counterparts are only down 2%. So there's a lot of those kind of numbers that are supporting that move towards some heifer retention happening here. And I would suggest likely the same.
In the U.S. okay, well, it's such a long cycle. Like, it's not like poultry where, you know, the supply can turn pretty quickly.
Yeah, I'll tell you in two weeks. Yeah, exactly.
Beef is way different. Way different. Okay. And really appreciate you joining us here today for the Beef Market Update. Have yourself a great weekend. Happy grilling.
Okay, thanks. You too, Shaun.
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