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CME: Canadian COF Significantly Smaller Than US Feedlot System

28 June 2019

US - According to Steiner Consulting Group, DLR Division, Inc., Canadian "Cattle on Feed" was released on 14 June 2019 by Canfax.ca.

Cattle on feed in Canada is significantly smaller than the US feedlot system at just under 1 million head as of 1 June. Larger numbers of cattle on feed compared to the prior year have been the norm for Canada this year, and June is standing at 108.5 percent of a year ago. That was the 13th consecutive month of higher year-over-year numbers.

Placements were notably higher than a year ago in April, rising 40 percent over the year before. The May figure came in quite a bit lighter shifting down to 82.8 percent of a year ago. Some of these dramatic percentage changes are related to last years sharp month-to-month changes (See figure below). So far this year, Canadian placements are up 101.5 percent above a year ago.

The May weight breakdowns showed sharp increases this month in steers weighing less than 600 pounds, up 14 percent compared to the prior year and 600- 699 pound steers, up 75 percent. Heifer placements in those same lightweight categories were down sharply, but showed year-over-year increases in heifers placed weighing over 800 pounds, up 25 percent.

Seasonally, Canada is entering the time of year where placements are smaller relative to the rest of the year. However, dryness across the western part of Canada could play a significant role this year. The North American Drought Monitor (see below) indicates most of western Canada is under dry to severely dry conditions.

The latest NADM is as of 31 May, but as pasture and range conditions deteriorate in Canada it could affect the number of feeder cattle shipped to the US Weekly import data of May feeder cattle numbers from Canada showed a significant slowdown compared to the prior months.

The last four months in aggregate were 22 percent higher than last year for cattle weighing 440- 700 pounds. This is in line with escalating drought conditions across British Columbia, Alberta and Saskatchewan.

The Canadian plains have seen some rain in June, but impacts have varied across the region. Our assessment at this time is that in the south, pasture and range conditions are a concern in the coming months, and could result in cattle being moved off summer grazing earlier than normal and early weaning in calves.

Feed costs are also expected to play a role as hay and grain prices are very high for cattle producers, and inventories are tight in some areas, making supplemental feeding a difficult proposition.

It is still early in the season and these impacts are forthcoming unless timely rainfall continues through the grazing season.


Daily Livestock Report - Copyright © 2008 CME. All rights reserved.


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