Bred cows are showing price strength at auction, prompting some market analysts to say it shows a desire among cow/calf producers to begin rebuilding their herds after
Four years of decline.
RECENTLY BRED
Bred cows, 1-3 months along that are classified medium and large no. 1-2 sold on a per head basis, have shown significant uptick across many of the USDA AMS reported August auction data, the Livestock marketing information Center in Denver said in a letter called Livestock Monitor. These cows generally are timing spring-born calves in 2024.
Replacement costs are substantially higher in the South, the LMIC said. The Southeast, in particular, has seen 40%-60% upward movement from a year ago.
Kentucky is one of the few states to see replacement values rise only 21% from last August, the LMIC said. Many of the northern tier states lacked data, including Kansas.
Missouri, where LMIC tracks two replacement auctions, saw increases of 24% in West Plains to 53% in Joplin, the letter said. Oklahoma City was up 57% from a year ago, which is interesting as cull cow values there plummeted recently.
FARTHER ALONG
Cows in the 4-6 months bred category, which will be calving this year, have seen similar increases: Clovis, NM, had prices jump 29% in August from last year, Colorado, up 21%, West Plains, MO, up 36%, Mississippi up 11%, and Kentucky, up 28%.
Out of the 15 replacement auctions LMIC tracks, only three had enough bred heifer data to make comparisons, the LMIC said. Kentucky’s combined auctions had data in bred heifers 1-3 months and 4-6 months, and those were up 22-25%.
West Plains, MO, which reports all bred heifers together (1-9 months), saw price data in August that registered 6% more than last year, the LMIC said.
Arkansas also showed the strongest increases, the LMIC said. Bred heifers 4-6 months increased 49% from last year, while those categorized as 4-9 months rose 35%. Bred heifers sold in Arkansas that were 7-9 months bred had prices 32% higher.
EXPECTATIONS
Prices were expected to escalate amid forecast tighter supplies next year, the LMIC said. Auction data moved exponentially higher as herds began cycling higher in 2014 and 2015.
That expansion effort was propelled by record high profits, and producers already are seeing better calf prices in some areas of the country than they did back then, the LMIC said. But costs have increased substantially as well.
It is a different environment now, the LMIC said. Profits likely will not be as good, and interest rates are substantially higher. These things may be a headwind for some producers.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $185.11 per cwt to $185.23, compared with last week’s range of $178.75 to $189.46 per cwt. FOB dressed steers, and heifers went for $283.74 per cwt to $284.17, compared with $283.80 to $293.58.
The USDA choice cutout Monday was down $0.86 per cwt at $317.04 while select was off $0.58 at $292.09. The choice/select spread narrowed to $24.95 from $25.23 with 73 loads of fabricated product and 19 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were down $0.10 at $1.60 to $1.80 a bushel over the Sep corn contract, which settled at $4.78 1/2 a bushel, up $0.07 3/4.
No contracts were tendered for delivery against the Aug cattle contract Monday.
The CME Feeder Cattle Index for the seven days ended Friday was $247.83 per cwt, up $2.24. This compares with Monday’s Aug contract settlement of $250.25 per cwt, up $2.62, and Sep’s $254.27, up $3.07.