Calf Producers Urged To Alter Sale Practices

Cow/calf producers wanting to market calves at weaning should look to move them earlier rather than later, said a prominent agricultural economist.

Andrew Griffith, from the University of Tennessee, wrote in his weekly market commentary that calf prices this fall were expected to decline.  Prices could drop into the mid-$120s for 550-pound steers in Tennessee.

Figuring the same $10 to $15 per cwt drop in the Southern Plains would take cattle there to the mid-$150 range.

Those prices probably sound harsh to some producers, Griffith said, and if they do, then producers may want to think about changing management and marketing practices to capture additional value.

 

RECENT PRICE GAINS

 

Nearby Aug feeder cattle futures have increased $15.32 per cwt, or 11.4%, since setting its contract low of $134.12 on July 21, more than $9 of which was witnessed last week. These stronger futures market prices translated to higher cash calf and feeder cattle markets.

Weekly auction market prices for steers were $1 to $6 per cwt higher compared to a week earlier while heifers were $3 to $6 higher.  Price gains also were evident in load lot sales last week.

Compared to last month, prices on video sales were mainly $3 to $6 higher depending on weight class.

At first glance, a $3 to $6 per cwt increase on load lots being marketing through a video platform does not look like a big jump.  However, Aug feeder cattle futures were trading in the $143 to $144 range at the beginning of July before the contract made its contract low.

This week, Aug feeder cattle futures were traded north of $149 per cwt, and the gains translated into the increases witnessed on August video sales.

 

OUTLOOK FOR FALL

 

The back half of summer usually is a strong period for feeder cattle, but many producers already are looking toward the fall marketing period.

Questions abound about whether calf prices are going to continue to strengthen or if they will falter.  The answer depends on the weight class and management provided to those animals, Griffith said.

Yearling cattle prices will likely remain strong the next few weeks, but will begin to taper off as the market moves closer to the fall, he said.  However, prices for these animals will likely remain relatively strong compared to calves coming straight off the cow this fall.

Many producers have a habit of weaning calves on the truck, meaning they don’t go the trouble to wean them at home and get them hardened for the next stage of their lives – a feedlot or winter pasture.

But feedlots don’t like these “bawlers” because of the heightened illness and death rates and will pay up for weaned backgrounded calves.

 

CASH CATTLE MARKETS REMAIN QUIET

 

Cash cattle markets Wednesday remained quiet with packer bids of $116 per cwt on a live basis and asking prices of $122.  Dressed-basis bids were $186, yet asking prices were $192.

Cattle traded last week $1 to $2 per cwt higher, at $118 to $119 live and $188 to $190 dressed.

The USDA’s choice cutout Wednesday was $0.98 per cwt higher at $200.87, while select was off $0.01 at $192.05.  The choice/select spread widened to $8.82 from $7.83 with 102 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Tuesday was $147.55 per cwt, up $0.38.  This compares with the Aug settlement Wednesday of $149.72, down $0.45.