Calf Demand Mixed; Yearlings Firm

Northern Plains calves last week sold mostly $5 to $8 per cwt lower while calves in the Southern Plains and the Southeast were unevenly steady to $5 higher amid strong demand for wheat grazers.

Yearling supplies are said to be tight across the country with prices steady to firm.

Sources say yearlings hold good demand while calves are sometimes unwanted because they are so young.  Some farmers and ranchers will sell calves as soon as they are weaned, and “bawlers” hold less favor with buyers.

Freshly weaned calves are experiencing stress from being separated suddenly from their mothers, and calves under stress are more prone to illness and death.  Many farmers and ranchers feel that by selling calves quickly after weaning, they can pass this illness and death loss on to the buyer.

Properly conditioned, weaned calves can command a premium, especially once a reputation for selling such calves is established.  Demand for certain calves also can be raised by producing documentation of weaning dates, handling practices and vaccination schedules, but this is more than many want to do.

Sources say the freshly weaned bawlers often come from smaller farms and ranches and are comingled with other such calves at the auction barn to formulate a grouping that is large enough to attract the attention of potential buyers.  Such comingling adds to disease exposure and the stress of establishing a new pecking order among the now-mingled calves, adding to the prejudice against them.

Experienced cattle buyers say the difference between long-weaned, conditioned 650-pound thin yearlings and fleshy, freshly weaned 650-pound bawlers easily can be $25 to $30 per cwt.




Corn farmers last week made good use of the dry/mild weather that covered most of the Corn and Soybean Belt most of the time.  They made giant strides in the corn harvest advancing the US total to 65% complete, compared with 46% the week before, according to the National Agricultural Statistics Service.  Iowa all but doubled its harvested acreage.

Many farmers are concentrating on soybeans for now because of price relationships, but once completed, they are turning again to the corn.

As farmers get done with the corn harvest and corn becomes much more available, demand for feeder calves and yearlings is expected to expand.  This year’s increased hay production could add to the demand for feeder calves and yearlings.




However, fed cattle prices are having trouble getting above the $170-per-cwt barrier, and this could limit the price backgrounders and feedlots are willing to pay for calves and yearlings.  Packer margins were calculated by the Sterling Profit Tracker to be a negative $44.65 a head last week.  Packer losses are common at this time of year and were even greater last year at $66 a head, but packer buyers will continue to resist paying higher fed cattle prices if they can.

Last week’s fed-cattle cash sales were down about $2 per cwt on a live basis to $167 to $168 and $262 to $265 on a dressed basis, and volumes traded were said to be restrained.  However, the number of cattle showing up on this week’s feedlot showlists is down in all major feeding areas of the country, showing feedlots retain some measure of market control.

The USDA reported its choice beef cutout Monday at $250.73 per cwt, down $0.47 from Thursday, and its select cutout at $239.40, up $0.77.  The choice/select spread narrowed to $11.33 from $12.56 on Friday.

The CME Feeder Cattle Index for the seven days ended Friday was $240.25, up $0.30 from Thursday.