The fall run of feeder cattle coming to market is in full swing and may even be at or near its peak, said Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist in a letter to Extension agents called Cow/Calf Corner.
USDA’s Agricultural Marketing Service reported that combined feeder cattle volumes for seven Oklahoma auctions were up 7.0% from last year over the past six weeks, Peel said. Prices for most weight classes of feeder cattle increased last week, suggesting that the last week of October may have been the seasonal low.
However, cold weather this week may dampen buying interest and could pressure prices a bit more as large fall run numbers likely will continue for another couple of weeks, Peel said.
WHEAT PASTURE LATE
Wheat pasture has been slower to develop this fall with dry conditions in many regions delaying growth, he said. Rainfall remains limited in western parts of Oklahoma with most of the eastern half receiving substantial precipitation in the past two weeks.
However, wheat pasture across the state continues to get closer to being ready for grazing and there still is considerable interest in winter wheat grazing across Oklahoma, Peel said.
PRICE PATTERNS TYPICAL
Current steer price ranges in Oklahoma are typical for this time of year with prices per cwt decreasing sharply from 400 to 600 pounds and prices largely unchanged at weights from 600 to 800 pounds, he said. Current price patterns show that feeder cattle value increases rather slowly across the light weights and increase by larger increments at weights above 600 pounds.
Current price patterns suggest marketing considerations for cow-calf sellers and stocker buyers, Peel said.
For example, the value of additional weight for retained weaned calves depends on the weaning weight of the animals and the amount of additional weight planned, he said. At 450 pounds, the value of 50 pounds of weight gain is only $34 a head but the value of 50 additional pounds for a steer weighing 550 pounds at weaning is $46 a head.
However, under current price patterns the value per pound of additional weight is higher as more weight is added, Peel said. Prices at this point in time do not account for price changes over the time it takes to add additional weight.
Still, current price patterns provide information about potential value relative to additional costs to add weight, he said.
STOCKER BUYER IMPLICATIONS
Stocker buyers also may consider the implications of buying different size animals depending on total weight gain planned over the winter, Peel said. Four-weight steers are very popular for stockers and sometimes get overpriced relative to heavier weight steers.
The value of 250 pounds of gain for a 450-pound steer may be $269 a head while the value of the same amount of gain for a 550-pound steer could be $343 a head, he said. But profit potential depends on cost of production and expected selling prices.
CATTLE, BEEF RECAP
Cash cattle trading this week got started at $115 to $116 per cwt on a live basis, steady to up $1 from last week. Dressed-basis trading was reported at $182 to $182.50 per cwt, up $0.50 to $1.
The USDA choice cutout Thursday was down $1.28 per cwt at $241.06, while select was off $1.69 at $215.84. The choice/select spread widened to $25.22 from $24.81 with 119 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Wednesday was $147.39 per cwt, down $0.05 from the previous day. This compares with Thursday’s Nov contract settlement of $1456.62, up $1.05.