Feed Prices Decline With Good Planting Weather

As this year’s corn and sorghum get planted and favorable weather forecasts abound, feed prices for cattle feedlots continue to slide.  Further declines are possible if El Nino lives up to its reputation of providing good and timely rain throughout the growing season.

A look at the history of weekly Southern Plains corn prices shows that prices are declining slowly and have been below the $4.00-a-bushel mark for a month.

A Livestock Marketing Information Center graph illustrates the slide.  It also shows that corn prices last year were rising at this time of year but began declining as fields were planted and rain returned to parched areas of the Midwest, Southeast and Delta.

Prices bottomed in early October last year as farmers refused to sell at the lower prices and chose to store the grain and await better times.

But the chart also shows that late September or early October is a good time for feeders to look at booking a large portion of their expected feed needs for the next several months.  Prices may get a little cheaper in January as country movement increases seasonally, but a very consistent dip occurs in relation to the early harvest.  Last year, the harvest low was very pronounced.




Southern Plains feedlot managers can’t just look at corn prices.  Competing feeds like wheat or sorghum also must be considered because there are times when these feeds become cheaper than corn and a viable feed alternative.

Feedlot managers can’t afford to miss the opportunity to feed something with a lower cost, however rare these opportunities are.  Currently, Southern Plains sorghum prices are $2.96 a bushel above corn, excluding it from rations.

Sorghum has a nutritional value that is close to corn.  It also can be grown in the Southern Plains where water is less abundant naturally than in the Midwest, where corn is king and soybeans are queen.

However, feeding sorghum has its own set of problems for feeders and often is shunned.  Its nutritional value is best when it is flaked to a very specific thickness, which takes skill in setting the rollers.  It also can be stickier than corn and can gum up the flakers.

And because corn fits with Midwestern farms better than sorghum, more of it is grown, keeping corn prices low enough to exclude sorghum in most feedlot diets.

As with corn, though, the most consistent time of year to purchase sorghum needs is late September or early October.




Cash cattle markets Thursday remained quiet.  Only a few trades on the fringes of the market were reported to the USDA.

In live-basis markets, 1,397 cattle this week weighing an average of 1,365 pounds traded at an average of $159.10 per cwt, compared with the bulk of last week’s action at $160.

In dressed markets, only 512 steers were sold with an average weight of 939 pounds at $255, and 440 heifers weighing 826 pounds changed hands at $248.98.  Last week, dressed-basis trades were mostly $255.

The USDA’s afternoon beef cutout value was higher Thursday, with choice pegged at $257.58 per cwt, up $1.43 and select at $245.84, up $1.57.  Volume was moderately active, with 111 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Wednesday was $0.62 per cwt lower at $215.41, compared with Thursday’s May contract settlement of $215.30, up $0.40.