Feeder steer and heifer prices were higher last week, as were slaughter cow and bull prices, but the primary driver of prices in coming weeks and months will be linked to pastures, said Andrew Griffith, University of Tennessee agricultural economist, in a letter to Extension agents called Tennessee Market Highlights.
Questions the feeder cattle market will wrestle with will be things like: how quickly will pastures recover as spring spreads across the country? To what degree will they recover? How much hay do producers have to tide them over until pastures can support cattle?
HAY IS AN ISSUE
Hay supplies right now are an important piece of the puzzle, Griffith said.
“Many cattle producers in Tennessee are short on hay as are many other regions of the country,” Griffith said. “The inability to feed animals will keep a lid on prices. The lid may not be screwed on tight, but the lid will definitely still be sitting there.”
If pastures become available early this year, the presence of hay supplies will be less important, and feeder cattle prices will jump earlier and faster than some expect, he said.
The opposite will be true if pastures don’t green up as hoped, Griffith said. Feeder cattle prices still are likely to rise in the spring, but not at the same speed or reach the same level as if there were grass.
CULL COW MARKET SUPPORTED?
Another market that could be supported in 2023 is the slaughter cow market, Griffith said.
A considerable quantity of cows still are moving through the auctions and into the slaughter mix, but the movement likely will slow as calving season hits full stride, he said. With calves likely to be very valuable this year, cow/calf producers aren’t expected to sell pregnant cows unless they are forced to by a lack of feed.
“Thus, there will be a balance between feeding high priced feedstuffs to finish out the winter, marketing slaughter cows that may or may not be bred, and retaining animals that are expected to calve (in) the next few months,” Griffith said.
“The failure to evaluate pregnancy status this fall could turn out to be an expensive failure for every open animal this spring that has been consuming a short hay supply and will fail to produce a higher valued calf,” he said. “Maybe this is the swift kick in the rear end some of us need to make better management decisions.”
Therefore, cow/calf producers should do what they can this year to get pastures back in shape after the drought.
“Anything that reduces forage production then reduces carrying capacity and thus revenue production,” Griffith said.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers last week ranged from $155.57 to $157.50 per cwt, compared with the previous week’s range of $154.80 to $160.00. FOB dressed steers, and heifers went for $244.42 to $249.79 per cwt, versus $244.52 to $249.16.
The USDA choice cutout Friday was down $0.36 per cwt at $264.74 while select was off $2.05 at $251.61. The choice/select spread widened to $13.13 from $11.44 with 62 loads of fabricated product and 14 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.65 to $1.80 a bushel over the Mar corn contract. Bids in Kansas were steady at $0.75 over Mar, which settled at $6.77 1/2 a bushel, up $0.02 1/4.
The CME Feeder Cattle Index for the seven days ended Thursday was $181.45 per cwt, up $0.55. This compares with Friday’s Mar contract settlement of $186.10 per cwt, up $0.17.