Calf Prices Falling Short Of Average

Steer calf prices are not measuring up, and since early May have declined along the path carved out by last year’s price plunge.

Average weekly prices paid for 400- to 500-pound, medium and large, No. 1 steers in the Southern Plains have held below the 2011-2015 average all year and now appear to be on last year’s slippery slope.

As of the second week of July, the average Southern Plains price for those 400- to 500-pound steers was $175.05 per cwt, down $1.22, or 0.69%, from $176.27 the previous week and down $19.89, or 10.2%, from this year’s high of $194.94 set the first week of May.

The latest price also was up $2.45 per cwt, or 1.42%, from the previous year’s $172.60 but $40.29, or 18.7%, below the previous five-year average of $215.34.




Andrew Griffith, agricultural economist at the University of Tennessee, said in the university’s weekly Tennessee Market Highlights: “Even if cattle are not ready to leave the farm, producers should consider selling them for a future delivery date as the upside potential may be small for cattle that will be marketed between now and the end of November.”

Yet even though spot prices are sagging, the market appears to be offering producers that chance to forward sell their calves, Griffith said.  It also is offering an opportunity for stockers to purchase calves and carry them through April.

From a stocker and backgrounding standpoint, the value of gain on recently purchased animals (in Tennessee) reaches as high as $1.23 a pound for cattle that will leave the farm in November, he said.  This demonstrates great potential for backgrounding home raised animals.

Griffith advised producers to be considering ways to market and/or purchase this year’s spring-born calf crop.

“For cow/calf producers the market continues to look favorable to growing those animals through the first of the year,” he said.

Similarly, for stockers, the value of gain last week was just shy of $1.20 per cwt for animals purchased in November and carried through April.




Feedlots also may get in on the action.  Recent price declines in feeder cattle may be giving feeders an opportunity to lock in a profit, if they have their corn needs covered, analysts said.

The price difference between 700- to 800-pound feeder steers is narrowing.  Analysis shows that the average weekly difference the second week of July was $35.00 per cwt, down from $35.15 the previous week, but well above the scant $5.85 of the last week in February.




Fed cattle sales on the livestock exchange video auction Wednesday averaged $118.27 per cwt, with trade in the south at $118.25 to $118.50 up $0.25 to $0.50 from last week.  In the North, trade was limited to one lot at $118.00, up $0.75 to down $0.75.  Lots with one- to nine-day delivery sold at $118.30, while lots with one- to 17-day delivery sold at $118.00.

Cash cattle trading was reported at $118.25 to $118.50 per cwt, up $1 to down $2.50.

The USDA’s choice cutout Wednesday was down $0.32 per cwt at $207.73, while select was up $0.24 at $195.49.  The choice/select spread narrowed to $12.24 from $12.80 with 152 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Tuesday was $149.16 per cwt, up $0.16.  This compares with Wednesday’s Aug settlement at $154.50, up $2.90.