Cattle markets have turned the corner showing signs of improvement over the last few months as prices edge six year highs.
Cattle Market Analyst with Gateway Livestock, Anne Wasko, says supplies are tightening, cattle feeders are getting more current and cattle on feed numbers are down three per cent from last year.
"Cattle prices are coming up. The fed cattle markets are kind of leading the way, averaging up over $180 last week and that's the first time we've seen that kind of an average price in Western Canada for fat cattle since 2015. And, therefore then no feeder cattle and calf prices also following suit too."
She notes the slaughter cow market has been super strong this year, well above last year with the average almost $40 cwt higher than last year.
"Its still hovering in that $113 - $115 area on the D2 average, and again the highest slaughter cow price we've seen for this time of year since 2015."
Wasko says a key factor with the increase in pricing now for the slaughter cow market is due to the drought and bigger cow marketings that we saw in 2021.
She says when focusing on that slaughter market we're still seeing very dry conditions down into the deep south plains, so we've got a U.S. cow kill that's up 14 per cent.
"That hasn't impacted prices (certainly north of the border) and their prices are still above a year ago, just showing the demand especially for that lean trim ( that hamburger beef ) that's been super strong here in 2022."
The cattle markets were quiet in June and July, but things started picking up in August, especially on the grass cattle market.
"Here in early September, things are really starting to rock and roll especially on the internet and video sales that are offering sale delivery down the road into the fall. So those prices are already showing, $40-$60 to $100 higher than last year, you know both on yearlings and calves even more so.
I think a couple of things right off the bat, we are seeing barley prices in southern Alberta 15 per cent lower than the same time last year. That'll be something we watch through the rest of the run. Remember last year, we saw a record amount of corn imported into western Canada from the US. So this is looking like a considerably different scenario ,in terms of at least there's feed in parts of Western Canada, and that's going to be important. The other point is, feeder cattle supply looks really tight. We've turned back to a net exporter of feeder cattle here in 2022. We're exporting more and importing less feeder cattle compared to last year. "
She notes as a result that's helping to keep the feeder supply pretty much on the tight side.
Statistics Canada recently released its report - the first report after their five year census report that came out back in May.
Wasko says the new report just confirming the trend that we've seen over the last number of years that the Canadian cow herd continues to get smaller.
"So bottom line, the total cattle number here in Canada, if you're kind of watching the big picture was down three per cent from 2021 to 12.3 million head, the smallest cattle herd in Canada since 1988. Looking at mother cow, beef cow numbers they are down two per cent to 3.7 million head."
The report also put Western Canadian beef replacement heifers down seven per cent from last year which makes it the smallest replacement herd since 2010.
She says when you think that through logically, that's gonna basically lock in the fact that we're going to see a smaller cow herd again next year, if our replacement heifers are down already.
Wasko cautions there's still lots of volatility out there.
"I mean, global issues continue to cause lots of volatility on day to day pricing, whether you're talking about energy prices or grain prices. So I mean, it's not like it's smooth sailing. So lots of volatility ahead unfortunately. But we are looking at 2023 futures markets for cattle prices in Chicago, as strong and higher than we've seen in in many years."
Based on the numbers and current indicators she feels there's a lot of confidence heading into the fall run and into 2023, with expectations that cattle prices are going to firm some more as we head into next year.