Annual Southern Plains Cattle Prices Seen Lower

Southern Plains average annual fed cattle and feeder steer calf prices are projected to decline into 2019 with only a minor wrinkle higher this year in fed steer prices.

Using USDA Agricultural Marketing Service data, the Livestock Marketing Information Center projected the declines.

The spike years of 2013, 2014 and 2015 are in the rear-view mirror, and it may be difficult for the markets to attain such prices for a long time in the future without long-term natural disasters like widespread drought causing extensive herd liquidation followed by an economic turn out of another “great recession.”

As bad as Hurricane Harvey is for the Texas Gulf, it probably won’t show up in annual nationwide herd numbers, and therefore is unlikely to affect annual US prices for either fed cattle or calves, market analysts said.  Local availability, transportation and feed prices almost surely will be affected, but not those of the nation as a whole.




The LMIC projected 2017 fed cattle prices to average about $122.50 per cwt on a live basis, up $1.59, or 1.32%, from the USDA’s preliminary 2016 price of $120.91.

For 2018, however, things turn south with a projected price of $118 per cwt, down $4.50, or 3.67%, from this year’s projected average.  The average annual fed cattle price of 2019 was projected price of $114, down another $4, or 3.39%.

Average projected prices for 700- to 800-pound feeder steers in the Southern Plains decline from 2016’s preliminary price through 2019.  For this year, prices were expected to average $143 per cwt, down $3.21, or 2.20%, from $146.21 last year.  Next year, average prices for these feeder steers were projected at $135, a loss of another $8, or 5.59%.  And for 2019, projected average prices may be around $132, down $3, or 2.22%.

Average prices for 500- to 600-pound steers in the Southern Plains also were expected to decline.  The USDA’s preliminary 2016 price for these cattle was $166.66 per cwt.

For 2017, the LMIC projects an average price for the lighter-weight calves of about $161, a loss of $5.66, or 3.40%.  For 2018, the average price could be around $153, a decline of another $8, or 4.97%, which could be followed by an average 2019 price of $150, down $3, or 1.96%.




Returns to cow/calf producers also may not challenge those seen in 2014 for some time either.  As the following graph shows, returns are inversely tied to the US herd size, and the low-point in the cattle herd came in 2014 as well as the spike in returns to producers.

And since the US herd is projected to continue growing into next year, at least, it might be inferred that producer returns will remain challenged as they have this year and last year.




There were no sales Wednesday on the livestock exchange video auction for the second straight week.

Cash cattle trading in the Central Plains last week was reported at $107 per cwt on a live basis, down $3 from the bulk of the previous week’s action.  Dressed-basis markets traded at $172 to $173, compared with $175 to $177.

The USDA’s choice cutout Monday was up $0.18 per cwt at $191.50, while select was up $0.32 at $188.62.  The choice/select spread narrowed to $2.88 from $3.02 with 94 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Friday was $142.61 per cwt, down $0.63.  This compares with Monday’s Aug settlement at $142.42, up $1.05, and the Sep settlement of $145.87, up $2.95.