Cow prices have garnered attention in recent weeks as price forecasts and projections specific to cull cows are uncommon, said Matthew Diersen, risk and business management specialist at South Dakota State University, in a Livestock Marketing Information Center letter called In The Cattle Markets.
However, the Economic Research Service provides a quarterly forecast for cutter cow prices at the national level on a live equivalent level, Diersen said. The projected price is generally available for a year ahead.
THE PROJECTIONS
The projections for the rest of 2024 are $132 and $122 for the third and fourth quarters, respectively, he said. Then, the projections are $118 and $130 for the first and second quarters of 2025.
The forecasts are higher than the observed prices for the past year, Diersen said. The forecasts are not fixed percents of the steer price forecasts, suggesting the ERS is credibly incorporating additional factors or different seasonality assumptions when preparing these forecasts.
The ERS also maintains cost-and-return data for a typical cow-calf operation, he said.
Purchased feed and harvested feed costs peaked in 2022, Diersen said.
Purchased and raised feed prices (mainly corn and hay) have fallen and are expected to stay lower through 2024, he said. From the August World Agricultural Supply and Demand Estimates report, corn production was expected to exceed use for the second straight year, leading to higher ending stocks and lower prices.
HIGHER HAY PRODUCTION
The August Crop Production report confirmed higher hay production levels in 2024 compared with 2023, he said. Acres were unchanged from the June Acreage report, so the new information was tied to yields.
In aggregate alfalfa yields and other hay were up from 2023 and above the 10-year average, Diersen said. The total production at 126.9 million tons was up from 118.8 million in 2023.
Alfalfa hay production was down sharply in Idaho and in Kansas compared with a year earlier, he said. Other hay production was down sharply in Oklahoma.
However, production was up sharply in neighboring Kansas and Texas, Diersen said. Hay prices nationally are sharply lower than a year ago.
GRAZED FEED
Grazed feed continues to increase, he said. The latest indication of this came from NASS data on pasture rental rates, where the national rate for 2024 was $15.50 an acre, an increase of 3.3% from a year earlier.
The highest state-level rate was from Iowa, where pasture rent of $63.50 per acre was up 5.0%, he said. Maryland had the next highest rent of $50.50 per acre. Several states in the southwest had lower pasture rents.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $183.00 per cwt to $184.74, compared with last week’s range of $183.00 to $196.22 per cwt. FOB dressed steers, and heifers went for $288.65 per cwt to $291.84, compared with $289.28 to $296.44.
The USDA choice cutout Thursday was down $0.09 per cwt at $311.51 while select was off $2.61 at $296.78. The choice/select spread widened to $14.73 from $12.21 with 119 loads of fabricated product and 16 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $376.62 per cwt, and 50% beef was $134.55.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.29 to $1.39 a bushel over the Dec corn contract, which settled at $4.10 a bushel, down $0.00 3/4.
The CME Feeder Cattle Index for the seven days ended Wednesday was $241.25 per cwt, up $1.74. This compares with Thursday’s Sep contract settlement of $237.12, down $2.50.