Calf Market Could See Rising Supplies

Although many spring-calving producers likely will not market their calves for another month or two, a few more feeder cattle than normal could hit the market during August and September, says a Mississippi State University agricultural economist.

Brian Williams, writing this week’s In the Cattle Markets for the Livestock Marketing Information Center, said much of North Dakota, South Dakota, Montana and a large portion of Nebraska’s Sandhills are in a severe drought.  He expects many producers in these areas will begin to pull calves off of pasture and market them earlier than usual to relieve pasture stress and to cut the amount of hay that has to be fed.

But, where will those cattle go?  It is a bit too early for them to be sent south to wheat pasture, Williams said.  Corn Belt producers will be more concerned with getting their crops out of the field than taking on stocker cattle in August or September.  This really only leaves two places:  back to grass further south or to the feedlot.

The latest cattle on feed report already shown evidence of the latter, he said.  June placements in South Dakota were up a whopping 67% from a year ago.  While they likely weren’t spring-born calves, it does hint that Northern Plains producers are trying to relieve grazing pressure on dry pastures.

Moving forward, it is likely that Northern feedlots will be looking to pick up some discounted lightweight feeder calves and grow them on cheap corn…that is if the corn actually is cheap, Williams said.




Looking at the current corn crop, harvest prospects look smaller than last year, he said.  Planted acres were estimated at 90.9 million acres, down 3% from a year ago.  The most recent crop progress report has the crop at 61% good or excellent condition, compared with 66% a year ago.

At this point in the season, some suggest the US may even see yield fall below the trend, he said.  However, there is still a whole lot of corn still sitting in storage, so even if yields fall short of trend line, it won’t be all that bad.

That will continue to pressure corn prices, particularly as harvest approaches, Williams said.  Dec corn futures already have begun a slow downward march, trading a full $0.30 lower than the early July high.

If Corn Belt weather holds out and there are no major hiccups over the course of the next month, the fundamentals suggest corn will continue to trend lower through harvest.

Lower corn prices will be a disappointment to producers, it could provide a much-needed boost to the cattle industry, he said.  Lower corn prices could help to boost feedlot demand for lighter weight cattle at a time when we will likely see larger supplies of these cattle.




Only one lot of 54 head with one- to nine-day delivery sold on the livestock exchange video auction Wednesday averaging $116.00 per cwt, down $1.68 from $117.68 last week.

Cash cattle trading was reported at $116 to $118 per cwt on a live basis, about steady.  Dressed-basis trades were reported steady at $188.

The USDA’s choice cutout Thursday was up $0.10 per cwt at $205.16, while select was up $0.36 at $197.78.  The choice/select spread narrowed to $7.38 from $7.68 with 81 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Thursday was $150.87 per cwt, up $0.44.  This compares with Thursday’s Aug settlement at $150.65, up $0.40.