MARKET INFORMATION UPDATE By Jamie Gamble, BFO Market Information Coordinator markets@ontariobeef.com • www.ontariobeef.com
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n 2019, the fed steer railgrade price traded narrowly throughout the year, with the spring high occurring in April at $257.83 dressed on average on a monthly basis, while the fall low was reported at $234.38 in October. This is a 9.1% decline from the spring high to the fall low which is in line with 2018, that saw a 9.4% decline, while 2017 was larger with a seasonal decline of 28.5%. From October 2019 onward, the market struggled and was unable to see a seasonal increase into late fall as processing capacity declined by about 1,600 head per week with the suspension and then closure of RydingRegency Meat Packers Ltd. Ontario processers increased production to try to pick up some of the slack, however it kept a lid on the prices in Ontario with very little change from October to December on a monthly basis. Overall, the Ontario railgrade annual steer price in 2019 was at $245.59 compared to $245.48 for 2018 and $6-$7 cwt below the 2016 and 2017 annual average price on a dressed basis. As of early January we are seeing improvement in the dressed prices, but cattle feeders are still struggling. The Canadian boxed beef prices this year are up from last year and the strongest annual average price for both AAA and AA since 2015. The boxed beef started the year off strong and for most of 2019 prices were above 2017 and 2018 and the five-year average, with the exception of the summer months where 2019 was well below very strong pricing in 2017. A good demand for beef the last quarter of 2019 was supportive to boxed beef prices and packer margins, providing incentive to increase production when capacity declined. As of November 30, 2019, processing volumes in Ontario at federal and provincially licenced plants were down from 2018 for steers, steady on heifers and lower on cows. At time of writing, the December values were not available. 2019 was on track to be steady to slightly stronger than 2018 volumes. As of November 30, 2019, volumes processed are down around 20,000 from 2018 for cows, steers and heifers, with volumes down just 1,000 from 2017 and higher than all
The information provided on this graph is based on weighted averages for actual data collected. Input costs are a guideline only and will vary from producer to producer. BFO does not take any responsibility and accepts no legal liability arising from or connected to damages or losses experienced by producers when using this information. This is to be used at your own risk.
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years from 2009 to 2016 inclusive. As the graphs indicate, despite the loss of one processor at the end of September, October 2019 volumes were better than 2017 but the November volumes in 2019 were the lowest in the last three years and the five-year average. Exports of cattle through Ontario ports to the U.S. as of November 30, 2019 have been lower than the last two years for both fed steers and cows but up slightly for heifers. Cow export numbers as of November 30, 2019 are down 2,262 head from 2018, but 2,273 more than the same time in 2017. Fed steer export volumes are down 179 from 2018 and 3,719 less than in 2017. Fed heifers totalled 27,951 head as of November 30, 2019, up 6,190 from 2018 and 9,629 more than the same time in 2017. A great number of the fed cattle exported to the U.S. for processing were reported to be dairy and dairy cross. It is only very recently that one U.S. packer was purchasing Ontario fed cattle. Cull cow volumes sold through auction markets in Ontario continued to increase again in 2019 with the annual total at 124,599 head, up 6.3% from 2018, up 20.7% from 2017 and the largest annual volume since 2014. Cull cow prices started out the year well below 2018, 2017 and the five-year average, but by May prices were stronger than 2018. The cull cow market followed the trend of the five-year average and 2017 fairly closely but at lower prices. Stocker and feeder cattle volumes sold through Ontario auction markets in 2019 totaled 258,755 head, which is the highest annual level seen since 2014. Annual average prices for steers saw each weight category down by $2-$6 cwt from 2018, but steady to $5 below the annual average price in 2016 and 2017. Heifers declined more than the steers this year with annual average prices below 2018 in all categories by anywhere from $4-$12 cwt. Compared to 2016 and 2017, prices dropped by $8-$24 cwt with the lighter weight categories experiencing the largest price declines. OB Continued on page 44.
