Feeder cattle markets have bounced back from the brutal February storm just in time for the termination of winter grazing of dual-purpose wheat, said Oklahoma State University Extension Livestock Marketing Specialist Derrell Peel, in a newsletter to Extension agents called Cow/Calf Corner.
FEEDER VOLUMES RISE LATE WINTER
Feeder cattle auction volumes in Oklahoma are quite variable in February and March, Peel said. Dual-purpose wheat production means grazing cattle must be removed promptly when the wheat begins the reproductive stage that produces a grain crop.
That change is indicated by monitoring wheat plants for “First Hollow Stem.” The timing of this varies by year as well as across wheat varieties.
The seasonal abrupt termination of wheat grazing often results in a week or two of noticeably larger auction volumes between mid-February to mid-March, he said. In 2018-2019, the largest weekly volume occurred in the second week of March while in 2020 the largest weekly volume occurred in mid-February.
STORM BROUGHT CHALLENGES
Additional challenges in 2021 resulted from the extended winter storm in February, Peel said. Many Oklahoma auctions were closed for one or two weeks, delaying typical feeder cattle marketing.
He said it was not a surprise to see an extremely large volume of 45,702 head the first week of March. This volume likely consisted mostly of feeders delayed from February but may also have included some wheat pasture cattle.
The bulk of the wheat pasture cattle are expected the next two weeks and large auction volumes are expected until mid-March.
Prices for calves and stocker cattle were higher last week, he said, reflecting some spring grazing demand and relatively low volumes of lightweight cattle this time of year. For example, the price of 450- to 500-pound, Medium to Large No. 1 steers was $179.37 per cwt.
Calf prices are following close to a typical seasonal pattern and are up 5% to 6% from last fall, Peel said. Heavy feeder prices have remained generally steady and currently are about 2% lower compared with last fall, slightly lower than seasonal patterns would suggest.
The price of feeder steers weighing 750 to 800 pounds (Med/Lrg, #1) was $133.74 per cwt., unchanged from the week prior, he said. The large auction volume last week included a majority of heavy feeders.
Another factor hanging over feeder markets is the dramatic rise in feed costs for feedlots, Peel said. The latest summary of the Kansas Focus on Feedlots data shows that feedlot cost of gain for closeouts in January was up 8.6% from the recent low in October.
Feedlot cost of gain will continue to increase and reflect higher grain prices in the coming months, he said. Feeder prices will continue to adjust in response.
CATTLE, BEEF RECAP
Fed cattle trading this week was at $113 to $114 per cwt on a live basis, steady with last week. Dressed-basis trading was at $180, also steady.
The USDA choice cutout Wednesday was down $1.74 per cwt at $227.29, while select was off $3.98 at $219.82. The choice/select spread widened to $7.47 from $5.23 with 105 loads of fabricated product and 28 loads of trimmings and grinds sold into the spot market.
The USDA reported Wednesday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.05 to $1.07 a bushel over the May CBOT futures contract, which settled at $5.34 a bushel, down $0.11 3/4.
The CME Feeder Cattle Index for the seven days ended Tuesday was $133.99 per cwt, down $0.03. This compares with Wednesday’s Mar contract settlement of $136.20 per cwt, down $0.95.