With new-crop corn prices looking good for cattle feeders this summer, feeder cattle prices have responded well for cow/calf producers, according to the “Livestock Monitor,” a weekly letter to Extension staff from the Livestock Marketing Information Center.
Data from the USDA-Agricultural Marketing Service show that prices for 700- to 800-pound medium and large No. 1 feeder steers in the Southern Plains have held up well this year in spite of increased availability. Feedlots have been bidding aggressively for cattle to fill empty pens.
In the fourth year of industry expansion in the US cattle herd, aggressive cash bidders are a good sign for the industry, even if it comes with some added volatility in the second half of the year, the LMIC said.
BY THE NUMBERS
By the numbers, producers with summer stockers and cow/calf operations should be experiencing a bit less market stress this year, the Monitor said. Yearling steers (those generally ranging from 750 to 800 pounds) at Oklahoma City averaged $145.13 per cwt during the first six months of the year, up from $138.68 over the same period in 2017.
The same comparison for steer calves showed this year’s average price for the first six months was $176.98 per cwt, compared with $167.37 over the comparable span last year, the LMIC said.
Those value increases were achieved while price swings have subsided. The low-to-high price spread during the first 26 weeks of 2018 was $17.77 per cwt for yearling steers, while last year, the price swing was $34.82.
LMIC analysis of annual yearling price volatility going back to 1992 shows that price swings this year are on track to be the smallest since 2012.
Based on monthly average prices, annual price swings from 1992 through 2002 never topped $20 per cwt, the Monitor said. Since 2012, annual price swings have been greater than $30 per cwt every year, with 2011 and 2012 high-to-low price swings of $19.49 and $18.34, respectively.
Annual price swings greater than $70 a year were seen in 2014 and 2015, and during the last 25 years, the most frequent annual price range was $15 to $20.
So far this year, the swing in monthly average prices has been $9.39, the LMIC said.
CHANCES FOR PRICES ABOVE $160 LOW
Yearling steer prices at Oklahoma City in the latest week averaged $151.67 per cwt, the LMIC said. The low monthly average price so far this year was $139.90.
Given the first-half price volatility, an annual price range of $15 to $20 has the highest probability, inferring that the chances for prices above $60 would not be a strong bet, the Monitor said.
Also, the high monthly average price so far this year is only $149.29 per cwt, making the latest cash price of $151.67 look very good versus the 2018 monthly average to date, the LMIC said.
CATTLE, BEEF RECAP
No cattle sold Wednesday on the Livestock Exchange Video Auction. One pen sold last Wednesday at $112 per cwt, up $6 from the last sale three weeks previous.
Cash cattle traded last week at $112 to $113 per cwt on a live basis, up $2 from the previous week, and at $178 to $180 on a dressed basis, up $5.
The USDA choice cutout Thursday was up $0.27 per cwt at $204.91, while select was up $0.69 at $198.27. The choice/select spread narrowed to $6.64 from $7.06 with 69 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Wednesday, was $149.21 per cwt, up $1.04. This compares with Thursday’s Aug settlement of $151.42, down $1.40.